The CAUT Investigation

Warning: this blog is not about hockey. Just something I need to get off my chest.

As noted in today’s Winnipeg Free Press article, the CAUT has released the report of its investigation into alleged violations of academic freedom at the University of Manitoba’s economics department, where we work.  The report was damning in its opinion of the department, and recommended a number of drastic measures that would steer the department in a direction that the majority of faculty are against. Many of the points raised in the report are inaccurate and misleading, but this is to be expected when the CAUT had no access to confidential documents and could not compel university faculty to be interviewed. As a result, the report is based on the opinions of a small minority of the department who agreed to the investigation. That the CAUT released such an obviously biased, one-sided report should raise questions and outrage from all of us whose union dues are being spent to fund such activities.

Although I do not wish to give credibility to the report by spending too much time criticizing it, there are a couple of points I wish to raise. First, the WFP article states that “CAUT claimed university president David Barnard urged economics faculty members not to meet with investigators and some professors subsequently refused to talk to them.” I did not participate in the CAUT investigation. To say that some professors refused to talk to the investigators is an understatement. The CAUT interviewed only seven of the current slate of 24. My choice to not participate was due not to advise given by senior administration, as was alluded to in the WFP article. I did not meet with them because I believed my participation would be fruitless. Knowing the source of the allegations, and the agenda of the CAUT, it was my opinion that the outcome of the report was clear before the investigation even started.

The WFP statement that heterodox economists are, in lay terms, those who “think outside the box” is lazy journalism. There are many people within mainstream economics who ‘think outside the box’ and move the field forward. Economics is not static and the working definition of what is inside and outside the mainstream is constantly changing.  However, within the department those who claim to be heterodox have a very specific definition of the term – heterodox is limited to those fields in the JEL codes B5.   In practise, we have no Austrians on faculty and the feminists do not align themselves with the heterodox group. So the view of heterodox in the department is actually very narrowly represented by Marxists and Institutionalists.

The investigators write that “among the panoply of academic economists, and in the Department that we are investigating, we discern three groups. (1) Those who practise and embrace heterodox economics; (2) those who practise mainstream economics but feel that heterodox economists have an important place in the profession; and (3) those who…feel that practitioners of heterodox economics have no place and should have no standing in the profession.”

I would place myself in group (2), with a caveat. As has been stated many times by many on the so-called ‘orthodox’ side, many of us believe that heterodox is a valid and important field in economics, but no more or less valid and important than the other fields represented in the department. That is the philosophy that drives my votes in department meetings on hiring and curriculum, and I believe this is a common view among faculty members. This viewpoint is different from the direction of the department in decades past, when faculty members considered heterodox economics to be of higher standing than other fields. In recent years, our faculty have voted to hire more mainstream economists in fields such as applied microeconomics, macroeconomics and econometrics, where we needed faculty. We have voted to increase the undergraduate and graduate requirements of theory, econometrics and math to bring our programs in-line with the rest of the discipline. But, we also voted to maintain the requirement of Honours students to take 6 credit hours of history of economic thought and 3 credit hours of alternative (read: heterodox) macro. Our union (UMFA) will argue that departments should have the right to self-govern on curriculum and hiring, that the faculty within a discipline are best equipped to determine the academic path of the department. To this end, the union should have clearly defended the department faculty votes to CAUT. They did not. Apparently our rights to self-govern are defended only when the results of the votes are consistent with the views of the union staff.

The WFP picked up on a section of the report that concerns interactions with graduate students. The WFP writes that “…orthodox members of the department behaved in ways that discriminated against doctoral students being supervised by heterodox economists,” the committee concluded. “This included treatment at oral examinations, advice about potential areas of study, funding decisions, and advice that their choice of heterodox supervisors was unwise in terms of their future careers.”

The statement that faculty were biased in their treatment towards students in funding and examination situations is a serious accusation. I cannot imagine that the CAUT has any factual evidence to make such a claim, since they did not have access to confidential documents and did not speak with the graduate chair. I have certainly never been aware of any such discrimination. To the other point, that advising a student that choosing to write a heterodox dissertation would be an unwise career move – well that is simply good advice. I don’t recall ever actually saying this to a graduate student, but if one had asked I would certainly tell them that unless they had a deep passion for writing a Marxist dissertation, if their goal was to land an academic job in a North American university, this would not be a good move. I was given the same advice in graduate school when I flirted with the idea of doing an economic history dissertation. I was told that the market for this field is thin and that I should focus on another topic until after tenure and then I could indulge in this area of research. The professor who gave this advice had earned a Nobel Prize in economic history, so it was not given out of disdain for the field but rather meant to be informative about the current economic PhD market.  I would absolutely give the same advice with the same motivation.

To end, it is hypocritical of the CAUT to make recommendations on the hiring and curriculum decisions of the department – the recommendations include that we must hire 3 heterodox positions in the next few years, that the head of the department should be replaced immediately and that any new head should be committed to maintaining two broad traditions in the department. They outline the composition of search committees and insist that our department council meetings should be chaired by an external academic. All this in the name of ‘academic freedom.’ As one twitter commenter (@alexusherHESA) noted “I think Academic Freedom as an intelligible concept in Canada, may just have jumped the shark.”



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.


Evaluating police patrols at minor hockey games

I have taught the first year university course “Introduction to Microeconomics” for ten years. My one goal in the very first class each year is to instill in the students one key principle of economics – nothing is free. There is opportunity cost associated with everything we choose to do and we must always consider alternatives when deciding how to allocate our scarce resources. Further, when considering costs and benefits, we should focus on the marginal (additional) costs and benefits.

I was reminded of this when I read today in the Winnipeg Free Press that police officers from the Winnipeg Police Services community relations department will be dropping in on minor hockey games during the year. Their goal is twofold – first, to educate parents about fair play and respect in sport and second, to provide a deterring presence against abusive behaviour. Comments from WPF readers alternated between those thinking this is a great idea, and those commenting that it is a wasteful use of police resources.

Is this a good use of the city’s resources? To answer this, we need to ask whether the marginal benefit of the police presence at the rinks outweighs the marginal cost. Consider the first goal – education. One parent from every family in Winnipeg minor hockey was obligated to complete a one-hour on-line course in Respect in Sport before they could register their child this year. Will the police be handing out pamphlets to anyone who has not already been made aware of the expectations of parents? I don’t think so. In terms of the second goal, although they gain a lot of media attention, there are a handful of incidents each year that lead to abusive behaviour. Will a police officer curb a hockey dad from yelling instructions to his son during the game? Should they? While it may not be good parenting, incidents reaching the level of negative behaviour that would justify police intervention are rare. It is difficult to believe that there will be a high marginal benefit of the program.

Perhaps the marginal cost of the arena visits is also low, I’m not sure. The question is, what would these officers be doing if not at the rinks. They are part of the community relations department so likely they are not out patrolling high-risk areas, but there is an alternate use of their resources. To properly evaluate whether there should be police officers at the rinks, one needs to know this information. My gut reaction is that monitoring hockey parents can’t be the best use of resources, but in the end it will all be left to speculation.

Unfortunately we will never be able to measure the costs and benefits, never be able to tell if the programs are successful. Public policies should be designed in a way that allows for their evaluation. In this case, though, both programs – the obligatory Respect in Sports program and the police arena patrols – are rolled out in the same year. If there is any measurable reduction in abusive hockey behaviour, the source of the reduction will be unknown. For this reason it is likely that we will continue spending resources on both programs without ever knowing if either is beneficial.


Does Defense Win Championships?

With hockey underway again I’ve been spending a lot of time hanging around the local arena watching my kids play, and an old mantra keeps springing up – “Defense wins championships”. A widely held belief is that defense wins championships and in hockey the way to win is to build from the net out. Upon hearing this, my first thought was that I’ve actually read something on this before and I went to track down where. I remembered that this cliché isn’t necessarily true, even if it seems logical.

Tobias Moskowitz and L. Jon Wertheim have a great book titled “Scorecasting: The Hidden Influences Behind How Sports Are Played and Games are Won” (info on this book can be found via their website: It’s a nice book for those interested in using data to better understand sports, and is full of chapters where the authors go out and empirically test beliefs widely held among sports fans. One of these is whether defense wins championships. The authors examine all 4 major North American sports (NHL, NBA, MLB, NFL) and find that defense is no more important than offense. Winning games requires either great defense or great offense, and if you are really lucky…both!! More on this work (as it pertains to the NFL) can be found on a guest spot they did for Freakonomics (

Reading this book led me to search for more on this topic, specifically as it pertains to hockey, and I came across a great website that marries hockey with data. The Department of Hockey Analytics ( is a website developed by IJay Palansky, Phil Curry, and Ian Cooper. Their recent article in the Toronto Start “In the NHL, Defence Doesn’t Actually Win Championships: Hockey Analytics” pretty much answers the question right in the title.

The authors look at this question a few ways, and I’ll leave the details of this article to the reader, but two things stood out for me. First, when looking at who won the Stanley Cup since 1980, 5 times the team with the number one defense during the season won, while 5 teams with the number one offense won. So no clear winner here in terms of defense vs. offense. Second, using a probit analysis to estimate the impact of defense and offense on winning semi-final and final playoff rounds from 1980 to 2013, the authors found that offense contributed more than defense to the likelihood a team would win (defense does matter, just not as much as offense).

So what’s the take away from all of this? Well two things. First, with this question specifically, defense is important, but so too is offense, and neither really dominates the other. As Palansky points out, goal differential is what wins and this can be achieved by scoring lots or giving up little. Second, is the broader issue of sports mantras. We hear them all the time, but the next time you hear one presented as fact, ask yourself…I wonder what the data says about this!


The Prisoner’s Dilemma of Spring Hockey

For many kids across Canada, hockey is winding down and summer sports are on the horizon. For some though, the real hockey season is only just beginning – spring hockey season.

Last year the Winnipeg Free Press gained a lot of attention from Winnipeg hockey parents with their article on spring hockey in Winnipeg, and earlier this week CBC ran a similar segment on the existence of these leagues.

For our family, this is our 4th season of spring hockey. Our oldest son has played for 3 different spring hockey organizations over the years and is excited for his spring season to begin next week (our middle son also plays hockey, however has only played one year and so isn’t spring hockey material yet, much to the delight of Janice). Participation in spring hockey isn’t rare among 10 year olds. On our son’s winter 9A1 team (the highest level in Winnipeg Minor Hockey for that age group but still a level with a lot of variation in hockey ability) 11 of the 14 kids are playing spring hockey this year. There are close to 15 teams in Manitoba at the 2004 age group. It is not just the superstars looking for an NHL career who are playing spring hockey.

Deep down, we know this is risky. In the WFP article linked above, Peter Woods, executive director of Hockey Manitoba argues that “a one-dimensional, full-time approach can ultimately lead to overuse injuries, burnout and a lack of exposure to other social groups and coaching styles.” We weigh this against our son`s desire to play at a high level.

Although we have our reservations about the amount of hockey our son plays, we are not going to discuss here whether spring hockey is good or bad. What we are interested in here is how we can use economic theory to explain why there such a strong demand to continue hockey until almost Canada Day. Some of the reasons for spring hockey demand that you might hear (these are not mutually exclusive) are (i) overly zealous parents with NHL aspirations for their kids, (ii) improved player development opportunities in spring hockey relative to winter hockey, and (iii) the possibility that kids really just enjoy playing and want to extend their hockey season rather than play soccer or baseball. The explanation that we are more interested in though, and one you hear less about, is what we’ll call the prisoner’s dilemma of spring hockey.

We believe one of the key reasons for joining spring hockey is not to make the NHL, but simply to help the kids to keep up with their peer group. If a player is trying to move to a higher level next year or not fall to a lower one, he or she needs to be competitive at tryouts in the fall. At tryouts, they need to be not just good, but as good (or better) than the other kids. It used to be that a one week camp before tryouts would be enough (that was certainly the case in the 1980s when Ryan was a kid), but now much of the competition has been playing hockey for 3 or 4 (or perhaps even 6) straight months over the spring and summer. In order to compete you need to do what the other kids are doing, and that’s where the prisoner’s dilemma and a little basic game theory comes in. (If game theory isn’t your cup of tea jump ahead to our discussion of the implications of the model and you should still be able to follow easily).

The game theory set up is as follows:

The players: “Our son” and “Everyone Else.”
The strategies: Play only 6 months a year (think the regular winter season) or play all year (think the regular winter season plus spring hockey).
The game: Each year there are two hockey seasons – the regular season and the extended (spring) season. Normalize the cost of the regular season to zero. The cost of the extended season is some positive amount which captures the monetary cost, the added risk of injury and the opportunity cost of not playing other sports. At the end of the extended season, the players compete for spots on the upcoming year’s regular winter season competitive team. The probability of making the competitive team depends on your relative amount of training.
The payoffs: Let C be the cost of playing the extended season, and X be the value that players (and parents) place on making the competitive regular season team. Assume players have a 50% chance of making the competitive team if they train as much as everyone else. If they train more, they have a 75% chance of making the team, if they train less they have a 25% chance of making the team.

The payoffs are shown in the following diagram.

As long as C < 0.25X (as long as the cost of playing is less than the expected benefit) the dominant strategy is to play the extended season. No matter what the “others” do, our son is better off playing the extended season in this model. Assuming everyone has similar payoffs, the efficient outcome (where we, together, would like to be) is where all play only the regular season. But the equilibrium outcome (where we end up, because we are all doing what is best for ourselves) is where all play the extended season. Economists use similar models to explain why firms advertise too much, why political candidates spend too much on campaigns, why co-workers vying for a promotion work too many hours, etc.

With this structure as a backdrop, we can then discuss a number of facets.

(1) Why are there more spring teams at the older ages? There are approximately 15 spring teams in Manitoba for 10 year olds, and 4 for seven year olds. It is not hard to see that X – the value of being on a competitive winter team – increases as the kids get older.

(2) Why has spring hockey grown in the past decades? We’ve assumed the benefit of the spring team is the additional probability of making the higher level winter team. This gap in probabilities grows the more kids are playing spring hockey. The more popular spring hockey becomes, the more beneficial it is for keeping up. In this respect, it is not dissimilar to the decision to attend university for some students. With more and more students earning a BA, the obvious benefit of the BA is sometimes unclear. Jobs that once required a HS diploma now require a degree. But the gap between the earnings of college graduates and high school graduates has increased so that while a university degree is not a ticket to a great job, not getting a university degree when so many others are will certainly hurt. Similarly, while playing spring hockey might not be a clear ticket to a competitive winter team, not playing spring hockey when so many others are will hurt your chances.

(3) It seems to us that spring hockey is more popular here than in some other provinces, why? We would argue that the costs of not playing other sports may be lower in Manitoba. An indoor rink in April is often preferable to being outside playing soccer in a parka, toque and mitts. Additionally, the seasons for baseball and soccer are quite short in Manitoba relative to other provinces.

(4) Finally, if we are in an inefficient outcome, and we (hockey parents) want to cut back on the amount of hockey that the kids play, what can we do to reverse the trend? Cooperation (agreeing to play less hockey year round) is unlikely to work because there are too many players involved and an incentive to cheat. So we need to change the payoffs of the game. One way to do this is to move tryouts for the Hockey Manitoba winter season. Currently kids try out at the start of the season in the fall. We’d suggest having the kids try out in the spring (following the end of winter hockey) for that upcoming year’s winter hockey team. This is done in London, Ontario (and other areas of Ontario), and spring hockey appears to be less popular there (granted, they also don’t have snow in April, so there are other differences). While this too has some problems, it does change some of the benefits of continuing hockey year round and it may reduce the demand for some.

In the meantime, we will be at the rinks well into June. Perhaps we will see you there.


The Economics of Paying for Goals

Economics is about incentives. Raising children is often about incentives as well. Sure, we would like our kids to eat their vegetables out of a love for vegetables, but let’s be honest, kids are quite the little self-interested utility maximizers who heavily discount the future. The threat of no dessert fits much better with economic theory than does the phrase “eat your broccoli so that you will be less likely to suffer from Type II diabetes when you are 65.” We bribe. No, strike that. As economists, we don’t bribe – we ‘nudge’.

But what about hockey? Does it make economic sense to ‘nudge’ children to provide extra effort on the ice? We often hear of parents paying for goals, or points, or championships – sometimes in money and sometimes with promises of slurpees for hat tricks. Is this optimal behaviour?

There are really two questions involved here. First, what is the behaviour we are trying to incentivize? And second, what is the best way to encourage children towards this behaviour.

I don’t think parents who pay for goals are really focussed on the goals. At least I hope they aren’t. I believe the true aim is to encourage their children to try their hardest when they are on the ice. Goals are just the most obvious outcome of this effort, especially for the youngest players. Sure, we would like kids to always try their hardest when they are playing hockey (as in anything they do) simply because this drive to succeed will take them far. But let’s be honest, kids are often distracted, lazy, or – the phrase heard most often around the rinks – inconsistent. The promise of a new Skylander if Johnny scores a goal is sometimes more salient than the inner satisfaction of playing a good game. The hope of parents of course is that the kid’s initial success (perhaps due in part to bribes) feels so good that it helps develop inner motivation for more success.

Assuming then that parents want to encourage children to try hard on the ice, is paying for goals the best way to do this?

First off, let’s not forget that this is a team sport. Paying for goals is inherently different than paying a swimmer for besting their lap time. The goal of a hockey player should not be to score a goal; it should be to help their team score more goals than the other team. To that end, one could consider a payment system based on their plus/minus or assists. However, lessons from labour economics suggest that even these broader measures could undermine group productivity. Performance-based pay is less effective when the tasks of the job include multi-tasking, teamwork, and other characteristics for which individual contribution is difficult to determine. Strong players may start to resent their less-able teammates for low stats, and those children not putting in a strong effort may be rewarded for the hard work of their teammates.

So what to do?

One suggestion comes from the economic literature on incentives in children’s education, most notably the work by Roland Fryer, of Harvard. ( Using very large, school-randomized experiments, Fryer measures the impact of a variety of financial incentive programs on student achievement. The key result is that rewards for inputs (class attendance, reading books, homework completion, good behaviour) produced results in terms of increased performance on tests. On the other hand, directly paying for increased scores on tests did not have the desired results. The rationale behind this – paying for inputs rather than outputs – is that children do not necessarily understand how to perform better on tests.

Just as young hockey players may not always understand how to play good hockey.

The lesson for hockey parents? Don’t reward children for outputs (goals, points, wins, plus/minus) but rather for inputs. Buy them a timbit after an especially good practise. Give them a loonie when they work on their cross-overs. Allow more time on the Ipad when they listen to their coach during practise. Set up a chart for the number of shots they take in the driveway.

Incentivize the inputs and let the kids do the rest.


NHL Expansion

Wade Poplawski and Michael O’Hara have a paper “The Feasibility of Potential NHL Markets Under the New Collective Bargaining Agreement” in the recent Journal of Sports Economics. Here is a link to the paper (gated): and here is the abstract:

Changes in the National Hockey League (NHL) since the lost 2004-2005 season have led to speculation about the feasibility of smaller market teams under the new structure. Recently, the NHL announced the move of the Atlanta Thrashers to Winnipeg to resurrect the Jets franchise lost in 1996. But is there any evidence that small market teams can survive where they were previously unviable? The authors address this question using data for the seasons since the structural changes. The results suggest that the Winnipeg move is likely to be successful and that other small markets may be viable under the current setup.

Poplawski and O’Hara use data from 2005-2009 to examine the factors that lead to franchise financial viability, and the neat part is they then predict the quality (in terms of the probability of positive operating income) of existing and potential NHL markets. An interesting finding is that with all the talk recently of Seattle as a potential NHL favourite for expansion, they actually perform worst of the markets considered in this study (below other commonly mentioned markets such as Houston, Kansas City and Quebec City, and highly questionable markets such as Orlando or Salt Lake City). As well they find that smaller markets (in particular Canadian markets) became more viable after the 2005-2012 Collective Bargaining Agreement.

With the recent collective bargaining agreement and the strong US and Canadian TV contracts the NHL has signed, I suspect the probability of success is now even higher in many expansion markets and existing NHL markets.


Parents and Respect in Sport

The topic of crazy hockey parents, often a source of discussion (and more) in rinks across Canada, has made the rounds in Winnipeg this past 2 weeks. First was the news of a fist fight among two parents and rival coaches of two 8 year old (novice) Winnipeg teams playing down in Fargo North Dakota the weekend before last.

 Second was the announcement days later that Hockey Winnipeg will be requiring hockey parents take a Respect in Sport course starting this upcoming hockey season before their kids will be able to participate in minor hockey.

Finally was the hockey fight that broke out among 12 year old kids this past weekend in Winnipeg, and the melee that ensued.

As a hockey parent (usually the good kind, but honestly not always) I find the incidents in Fargo and Winnipeg unfortunate but not surprising, and the efforts of Hockey Winnipeg a step in the right direction but unfortunately not something that will cure the sort of “headline” incidents we read in papers across Canada. First let me focus on why these actions of Hockey Winnipeg likely will have only a marginal affect, and then why this issue of aggressive hockey parents matters for the success of minor hockey in Canada.

From my experience (5 years as a parent of a kid in minor hockey, as well as a few years as a coach), overly aggressive parents usually fall into one of two groups:  intense hockey parents and protective hockey parents.  Those in the first group may believe their kid is going to the NHL (WHL/NCAA/etc)  or at the very least spend significant money and time trying to make their kid a competitive player within their peer group (so they can make AA, AAA, top spring teams, etc). These parents are heavily invested (financially and emotionally) in their kids’ hockey development and so not surprisingly are also heavily invested in the games these kids play.  Many of these parents coach hockey when their kids are very young, so they have already taken the Respect in Sport course (note that the two incidents above involved coaches).   For the non-coaches in the group, it is unclear to me that an internet course will have much impact on their intensity at the rink. 

The other group are the parents who witness their child being harmed or being put in harm’s way during a game and lash out.  Will a Respect in Sport course have much impact here?  As any parent knows, their kids are the most important things in their lives, and when they see their child harmed or potentially harmed, the protective side comes out. A course is not going to offset that natural instinct to protect.

This is not to say that the Respect in Sport course is going to make things worse, it won’t.  Calgary introduced a program three years ago.  Since the program was begun, disciplinary actions against parents has declined from approximately 25 per year to 21 or 22.  Not a big change, in my opinion, and perhaps not a causal relationship.    

The program may help with the image of minor hockey in Canada.  If Hockey Canada wants to get more kids (and their parents) interested in minor hockey, they need to do more to improve the image of minor hockey and hockey parents.  

While this is not a single solution problem (or an easy one), something that will go a long way in improving parent behaviour is improving the refereeing in minor hockey.  Often these headline incidents occur as a result of games getting out of hand, leading parents, coaches, and the kids to do regrettable things on and off the ice.   This isn’t to say there aren’t high quality referees out there, there certainly are. And no one would argue that being a referee is easy.  It’s a tough job, especially for teenagers, and minor hockey has a tough time finding referees. Having said that, minor hockey owes it to the kids on the ice and the parents paying pretty serious money for their kids to participate in the sport, to ensure that there are competent referees.  Too often the games are policed (at least at the younger levels) by two very young, inexperienced referees.  A big step forward would be to require one of the referees (for every level of play) be older and/or experienced.  There needs to be someone on the ice who is confident enough to make the hard calls on the ice and is willing to stop the game until a coach or an abusive fan leaves the arena.  When this happens, things get settled very quickly. 

This is obviously part of a larger discussion, but courses like Respect in Sport are only a small part of the larger measures needed to improve minor hockey for all involved, and for those potential parents and kids that Hockey Canada wants to reach.


Who to Blame for NHL Ticket Prices

Not a big point to raise today, but a timely one given recent events in Winnipeg. Since the summer we’ve seen the Winnipeg Jets successfully sign a number of their key free agents to fairly significant long term contracts, the NHL recently announced a $5.2 billion Canadian TV deal with Rogers Media, and today came the announcement that Winnipeg will host the 2016 Heritage Classic (apparently the game will be held in February, though I hope for the fans’ sake it’s March or April, either way it will be a real money maker for the Jets).

The reason I mention these events is that inevitably you hear about how the players and owners are making money hand over fist, and if these players weren’t so overpaid (a blog for another time) and the owners weren’t so greedy, then tickets wouldn’t be so expensive and average folks wouldn’t have to struggle to take the family to an NHL game.  Economists of course are at this point saying to themselves “the Jets price according to demand and this other stuff really has little to do with anything”. And of course that’s the point people often fail to understand.  Teams like the Jets hold monopoly power (there is no close substitute for the good, professional hockey,  that they provide to the people of Winnipeg).  When they make pricing decisions they are simply responding to the demand they face in their marketplace. It shouldn’t be surprising then that when you look at the recent Forbes data on the most expensive average ticket, Toronto tops the list followed by  Chicago, Winnipeg, Edmonton, Vancouver, Calgary, Montreal. What stands out here (beside the large number of Canadian teams) is that these are major hockey markets with extremely strong demand for professional hockey (Phoenix has the cheapest tickets by the way). These teams charge the most because they face the largest demand for their tickets. Again, it’s not because they have the largest payrolls or the greediest owners, but simply lots of people who are willing and able (even if it’s a stretch) to buy tickets at these prices. Player costs are not driving ticket prices, and if owners charged lower prices, it would simply make it even more difficult to find what are already tough tickets in places like Winnipeg and Toronto. NHL teams are businesses after all and if they sell out when ticket prices are high, it makes little sense to lower their price.

Are Jets tickets expensive?  Well for most people (including me) the answer is yes. I have gone to three games this year and depending on the game, a pair of decent seats can run you close to $300 once all the fees and taxes are added. It’s a costly event no doubt, but keep in mind that every time I’ve gone the game has sold out, tickets are generally quite difficult to come across, and those on the secondary market like StubHub sell well above face value.  These are all indicative of substantial demand and no lack of people wanting to buy tickets.

So unfortunately it appears when looking for someone to blame for high ticket prices we can’t blame the players or the owners. We really only have ourselves to blame and those like us who really enjoy going to a game and clearly are willing to pay the price to do so!


The price of ice and the costs of hockey.

The Globe and Mail series on the effect of inequality on our communities and aspects of our daily lives is quite interesting.  In one article, James Mirtle writes that inequality has impacted the ability of many families to enroll their children in hockey.   I have previously blogged about the impact that inequality may have on the costs of hockey, and noted that the provinces with the highest levels of inequality have the lowest participation rates in minor hockey.

However, I disagree with Mirtle on the ‘obvious’ solution to spiraling costs – subsidizing arenas and ice times.    This changes the price of hockey, not the cost of hockey.  In fact, it’s not improbable that such interventions could lead to an increase in the average amount spent on minor hockey.

The G&M article laments both the amount required to play elite hockey, and the amount required  to play at lower levels of competition.  I’m more interested in enabling families to enroll their children in hockey just for fun.  I’m not convinced that competitive hockey is that much more expensive than other competitive activities.  I have one niece who plays year-round competitive soccer, another who is involved in competitive Irish dancing and a nephew who plays elite baseball.  The amounts spent on these activities are comparable to what we spend on competitive hockey.    So why the continual focus in the media on the spiraling costs of minor hockey?  I believe the differences is that, unlike these other activities, it is becoming  too expensive to even play organized hockey just for fun and this strikes some as simply un-Canadian.

We also need to be clear on the difference between the costs of playing hockey and the amount spent on hockey.  The G&M article quotes the average amount spent.   If we are concerned with enabling children to play hockey (as opposed to enabling children to play elite hockey) then the important figure is the cost necessary to play the game.  It is quite possible to outfit a child for hockey for a couple of hundred dollars, and to play only the regular Hockey Canada season.  If your team practises once a week and does not travel to out of town tournaments, the overall cost can be comparable to other activities.   The average amount spent is higher because many children and their parents want to play more often and participate in out-of-town tournaments, and this leads teams to raise the price.  Outside the regular season, many families also invest more time and money in better equipment, training camps, spring hockey, power-skating, 3-on-3, dryland training,  etc. etc.    The teams practise more because other teams practise more; players engage in additional training because other players engage in additional training.   Economists would explain this over-investment in hockey using either labour economic theory or basic game theory.

Like all sports, success in hockey is relative.  You don’t need to be good to win the game, you need to be better than the other team.  To make the competitive 9A1 team, the AAA spring team,  the WHL, the NCAA or the NHL, you don’t need to be a great hockey player.  You need to be greater than everyone else competing.    While this is true in most sports,   I would argue that, in Canada, the gap between the reward for making it versus the reward for just missing out is much greater in hockey, both at the top levels (consider the gap between the NHL and the AHL*) but also at minor hockey levels.   Kids idolize hockey players, and this filters down  so that the 13-year old who plays AAA hockey has quite a bit of swagger walking around in his team jacket, perhaps more so than his friend who is a competitive swimmer.

In labour economics, this is called a Tournament Model of Compensation.  When the gap between the reward for the top level and the next level is very high, there is a strong incentive to invest work effort in the hopes of moving up.  In fact, the model can predict that players not only invest in work effort, they over-invest.  Vice-presidents of a company will work 100-hour weeks, trying to out-perform the other VPs in an effort to be promoted to the top spot.    Similarly, kids will spend 10 hours a week at the rink, in the hopes of winning the city championship or grabbing a spot on the competitive team.

We can also model this as a repeated prisoner’s dilemma game in which players end up at the inefficient equilibrium of over-investing.

So the problem with subsidizing ice times is that this type of intervention lowers prices but does not necessarily lower costs.   Since teams have flexibility in how often to practise and where to travel, the result of lowering the price of ice time could simply be more ice time.   Similarly, providing grants to lower income households to cover hockey costs means more competition for the elite teams.  This could result in the wealthier parents demanding even more ice time or additional training and the cost of being on the team could rise.

A solution that better fits the problem is one that introduces limits on the amount of training teams can purchase.  In the types of models described, constraining behaviour can have a positive outcome.  Hockey Canada could set the amount that teams could charge, or set a maximum number of practices, games and tournaments for the season.   Granted, this would not eliminate the ability of parents to go outside the Hockey Canada program and so over-investment in hockey would still occur, but it would at least open up a base level of ‘playing for fun’ that currently may be difficult to find, especially in jurisdictions with high inequality.


*This isn’t to say the gap between the top levels in baseball, football and basketball are not high, just that they aren’t as popular or widely discussed as hockey.