Festival of Lights canceled or, How to anger everyone through economic ignorance

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Well, it’s that time of year again, and as we lack the potential for snow here in Florida, we rely on twinkly Christmas lights to get us in the holiday spirit! The Orange County Park & Rec department (OCPR) here in Florida has been organizing the Cypress Grove Festival of Lights for 15 years. This year, though, it all went horribly wrong. On the festival’s first night, demand increased by 800% over last year. Instead of a 200-car turnout, 1800 slow-moving vehicles turned up, paid their $3, and commenced to clogging the road. What used to be a fun holiday tradition soon became a traffic nightmare, as well as a safety concern.

As usual, we’re witnessing another government entity trying to “do good” through economic ignorance. As a result, people are pissed. Residents are angry, inconvenienced and late home. County officials are angry, frustrated by their inability to handle such a large crowd. And Christmas light enthusiasts are angry, disappointed the event has been canceled. So where did the OCPR go wrong?

They didn’t charge enough for the event. And here’s why economics matters, even at Christmas, even at the county level.

We now know that 1800 families were both willing and able to pay $3 to consume this experience. That’s just a given – think of it as “science”: under the given demographic and financial circumstances present in and around Cypress Grove, Florida in December of 2015, 1800 consumer units are both willing and able to pay $3 to consume this experience.

And that’s OK. That’s even a great thing, if you’re trying to attract 1800 consumer units! But Cypress Grove was only trying to attract about 200. Put another way: Cypress Grove could only handle about 200. That’s because the residents who lived there were either unwilling or unable (or both) to endure the traffic congestion making a 3-mile drive home take 2 and a half hours. Police on duty that night were either unwilling or unable to manage that amount of traffic. And apparently, the county is either unwilling or unable to increase the man hours necessary to manage that amount of traffic.

Economics (the art of not making everyone angry) is all about who is both willing and able to do things. What did 1800 cars willing and able to pay $3 tell the OCPR? Raise the price!

Prices aren’t just something one person can guess at. Markets determine prices. And just as a reminder, markets aren’t some nebulous economic concept or nefarious committee of top hats. Markets are more like soylent green: markets are people.

The market for Christmas Light festivals (people who enjoy Christmas Light festivals), or more specifically, the market for that in and around Orange County, has just given us a valuable message: $3 a car will attract about 1800 of us right now. The market for supplying the Christmas Light festival venue (people living and patrolling in Cypress Grove) has given us another valuable message: we can’t handle 1800 cars a night. So the market (all the people on the both the supplying and demanding side of this event) is telling us the price is too low. In fact, this is exactly how markets determine prices, and why government should never determine prices. The people are telling — nay, screaming — for the OCPR to raise the price!

But of course, the OCPR didn’t do that. It’s government. So rather than figure out how to achieve balance, harmony, and happiness through economics, they canceled the event. Gotta love progress.

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