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Monday, June 5, 2017

How Much Should You Pay for a Rockies Ticket If All You Care About Is Energy Savings?

The Colorado Rockies are having a bit of a strange giveaway tomorrow: all fans will receive an LED light bulb from Xcel Energy as they leave the stadium after the game. This odd promotional item spawned a tongue-in-cheek conversation about how a fan should approach their buying decision from an economic perspective, relative to the value of the free light bulb. What is the break even price a fan would be willing to pay if all they cared about was the light bulb?

According to this site comparing LED light bulbs to CFLs and incandescents, a household with 25 bulbs would save $6668.75 in energy savings, or $266.75 per bulb. The cost of the bulb itself should be factored in as well, and an LED bulb is equivalent to roughly 40 incandescent bulbs, over the lifetime of the bulb. Incandescents cost about $1 each at the Home Depot, whereas LED bulbs cost about $4 each. So we'll take the lower cost of these two options, i.e. purchasing 1 LED bulb for $4.

This adds up to $270.75 in the value of the LED bulb, between the energy savings and actual cost of the bulb. There are currently tickets available for as low as $17 on StubHub, which falls well below the calculated value of the giveaway. For simplicity, I'm going to assume that the utility of enjoying the actual baseball game is exactly equal to the cost of the fees on the ticket (so $6.90 worth of enjoyment on the $17 get-in ticket). So since there are over 1,000 tickets available at less than $270, get out there baseball fans in the Denver area!

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