Elasticity of Demand and Manitoba Minor Hockey

Following an altercation in the U.S. last year, a Winnipeg couple was penalized with a one-year suspension from minor hockey. Their son could register to play with Manitoba Hockey, but the parents would not be allowed to attend any practices or games. Instead, the couple chose not to register their child for minor hockey, and the Winnipeg Free Press reports that this response surprised members of the discipline committee. That they were surprised at this outcome suggests that they are underestimating the elasticity of demand for minor hockey in Manitoba.

For those of you without first year economics, elasticity of demand measures how sensitive consumers are to the cost of goods. A good that has few alternatives (e.g. milk) has an relatively inelastic demand – an increase in the price will result in only a small reduction in the quantity demanded, since consumers have few other options. A good that has many alternatives (e.g. a certain brand of beer) has a relatively elastic demand – an increase in the price will result in a large reduction in the quantity demanded, as consumers move to alternatives.

Hockey Manitoba believed that if they raised the cost of minor hockey for this couple, they would still enroll their son in minor hockey. This suggests that they believe that the demand for minor hockey is relatively insensitive to cost (read: inelastic demand). If the parents resided in a small town, this may have been the case. But in Winnipeg, there is an ever increasing number of options available to Winnipeg hockey players during the winter months – private skills camps and three-on-three leagues, for example. In addition, spring hockey is gaining in popularity and lies outside Hockey Manitoba’s jurisdiction.

This case should serve as a lesson to Hockey Manitoba – demand for winter hockey is becoming more elastic. There is no monopoly on winter hockey. With increasing options to parents, Hockey Manitoba will have to be more conscious about the costs of minor hockey and remember that they have viable competitors.

JRC

Advertisements

One thought on “Elasticity of Demand and Manitoba Minor Hockey

  1. Maybe Hockey Manitoba should reinstate the initial ban of three years or the other leagues should have one question in their registration policy> Are you presently suspended from playing under Hockey Manitoba? End of discussion

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s