Should Football Fans Pay for Security? Effects of a Security Fee

Abstract

There is a lively debate on whether football fans should pay an additional security fee, added to the price of tickets, to finance police activities on match days. This paper investigates the price effect on the demand for tickets in a dynamic setting, by considering two subgroups of spectators, namely fans and hooligans. In contrast to the previous literature, we analyze a situation in which the demand from each subgroup causes a negative social externality for members of the other group but, simultaneously, a positive one for members of the same group. We show that charging a security fee may start a dynamic process, leading to fewer fans and more hooligans attending matches and thus, counterintuitively to even more violence. Therefore, the present study provides an argument to refrain from charging a security fee. As an alternative economic solution, we discuss the strategy of outpricing hooligans.

Keywords: Hooliganism, Mob-goods, Security fee, Football, Violence

JEL Classification: D11, D62, D74, H23, Z28