Measuring the externalities of late night transit

On the same day that the future of the MBTA’s late night service was reportedly imperiled, the Commuter Rail operator Tweeted that its trains would not be held for the end of the Garth Brooks concert slated to begin at 10:30 p.m. There was no such Tweet necessary from the core bus and subway services, because the Friday concert would certainly end in time for the late subway trains which would depart downtown around 2:30.

Which is a big deal. Concerts of this sort are permitted by the city of Boston, and without late night T service, they probably would have not occurred at all. It’s not every night that a popular act will play for the first time in nearly two decades in Boston, but the possibility of scheduling later shows brings tens of thousands of extra visitors to the city and whether they ride transit or not, they support the local economy.

Are all of the concert-goers discretionary visitors? No. Certainly some would have come downtown and taken advantage of nightlife if there were not this concert. But many do. The nearest venues on Brooks’s current tour are in Pittsburgh and Buffalo, so this is a regional draw; and may even attract some fans from abroad who would come to Boston for the show. There are 15 million people in New England, and only about one in six of those live within a late-night MBTA service corridor (and the Garth Brooks demographic is probably less likely to live in town). But others may book a hotel, or arrive by car for dinner, and then go and see the show.

How much is a concert of this type worth? Let’s throw around some numbers (and, yes, these are all guesstimates, yell at me in the comments if I’m off by an order of magnitude but not if I’m off by 25¢):

  • The TD Garden holds about 20,000 people for concerts. The price for each ticket for these shows is $57, and according to this site, about $15 of that goes towards running the facility. That’s $300,000. Add to that $10 of food and beverages purchased by each concert-goer, another $200,000. Let’s assume that half of this total goes towards staffing and another 10% towards state and local taxes. That’s $300,000 for the local economy.
  • What about parking? Let’s say half of the people coming to the concert park downtown, and pay an average of $10 to do so (some people will find free meter parking—and may use the MBTA to get to and from it—while some will pony up $40 to park at the Garden). That’s another $100,000, with about 7% captured as sales tax (and if Boston had additional parking taxes like many other cities, it could capture more).
  • But those are the direct costs. Let’s say that 1000 people at the concert “make a weekend of it” and book a hotel room in town at $200 per night. That’s another $200,000 (taxed at 14.45%). They’ll have $100 worth of meals, too, so there’s another $100,000. A good number (half?) of people will come in early before the concert and go for dinner or a beer (or both), spending, say, $25 per person, or $250,000; if the concert lets out at 12:30 a.m., some may take advantage of late night service and have a beverage afterwards as well.
  • And late night ridership? Let’s say 5000 people take the T to the concert, and 1000 of those park at an outlying terminal, and half of these people already have a monthly pass. The numbers aren’t huge, but it still accounts for $5000 in additional fares and $4000 in parking fees. Not huge, but not nothing.

Let’s add this up. You get about $1,150,000 in additional local spending. With sales, hotel, meal and payroll taxes, local and state governments can recoup about $100,000 directly in sales taxes. And the T gets about $10,000 in additional fares. These concerts won’t occur every weekend, but even if there are 10 such events per year, it would pump an extra $11 million in to the local economy, of which at least $1 million would reach tax coffers, and an extra $100,000 for the T. The total cost of running late night service is not offset by this, but these events are only feasible because of the extra service.

Then there’s the real game-changer: are acts more likely to come to Boston if they can perform two shows per evening? For a busy venue like the Garden (with the Bruins and Celtics and other events like Mice on Ice), being able to squeeze multiple events per day allows an act to open for only two or three days but have five or six shows. (It’s no coincidence that the Garth Brooks concert falls during the NHL All-Star break; shows don’t materialize out of thin air, although they do get set up overnight.) If you get a couple extra shows to play Boston which otherwise would not, then you’re getting multiple shows on nights the Garden might otherwise sit dark.

This past summer, I participated in a hackathon that showed parallel results over a longer time range: late night T service seemed to increase ridership earlier in the evening and longer-distance taxi fares later on. But we didn’t examine the potential for late night events to boost the local economy. If the T looks towards cutting service, it really should make sure to look at events like this which benefit from the availability of late night service (even if not that many people use the service to get to the event). Not doing so may be penny-wise and pound-foolish.

Leave a Reply