National

What I learned about pent-up demand in 1919: Planet Money: NPR

Editor’s Note: This is an excerpt from Planet moneyNewsletter.You can do it Sign up here..

Babe Ruth, a Boston Red Sox pitcher in 1918. That year, World War I and the Spanish flu pandemic reduced the number of participants in MLB games to more than half of the previous season.

Library of Congress


Hide caption

Switch captions

Library of Congress

Babe Ruth, a Boston Red Sox pitcher in 1918. That year, World War I and the Spanish flu pandemic reduced the number of participants in MLB games to more than half of the previous season.

Library of Congress

1918 must have been a great year for baseball. A young left-handed pitcher named Babe Ruth began this year by throwing a victory on the first day of the Boston Red Sox. Shortly thereafter, Ruth lobbied the team’s manager, allowing him to play in other positions so he could spend more time on the plate. The strategy worked, and Ruth began running as a home run superstar, helping to lead the Red Sox to the World Series.

However, World War I and the deadly pandemic drastically reduced the demand for watching ball games in 1918. Georgia Tech historian Johnny Smith says soldiers returning from Europe brought a new species of Spanish flu to Boston a few days before Ruth led the Red Sox to the World Series. , Co-author War fever: Boston, baseball, and America in the shadow of World War I.. “Boston will be the epicenter of the second wave, which was a more virulent strain of the virus.”

Despite the Red Sox heading for the series’ victory (the last victory before the infamous dry spell that lasted until 2004), the flu was already vacant due to World War I Fenway Reduced attendance at the park. The stadium could accommodate 35,000 people, but in Game 5 of the series, only 24,694 fans were on the stand. The next day, as the number of cases of influenza increased, Boston public health officials warned Boston citizens that they should be wary of the virus. In Game 6, when the Red Sox won the title, only 15,238 people appeared. Overall, the war and pandemic have reduced the number of participants in MLB games to more than half of the previous season.

By 1919, the war and pandemic were over and a tsunami of baseball fans rushed to the stadium. The number of participants in the game has more than doubled. From 2,830,613 in 1918 to 6,532,439 in 1919. This is a classic example of what economists call “stagnation of demand.” After being unable to do anything, when constraints such as depression, war, and the end of a pandemic are lifted, people greedily consume what was previously out of reach.

Now that light has begun to appear at the end of the COVID-19 tunnel, the term “stagnation of demand” is echoing throughout the business world. JetBlue CEO says the growing demand for travel will help restore the profitability of his company. Marriott executives claim that people rush back to the company’s hotel room. The term “pent-up demand” has never been used, according to a recent analysis by AlphaSense, a company that uses artificial intelligence technology to screen Securities and Exchange Commission filings, event records, and other business documents. It’s getting higher.

Industry executives devastated by COVID-19 clearly want investors to see them on the verge of a roaring revival. And some evidence suggests that they may be correct. According to data from the US Bureau of Economic Analysis, people may have extra cash to burn on big trips, gorgeous cocktails, and Broadway shows due to the surge in national savings rates during the pandemic. And guys, do people miss going out?

According to a recent Harris poll, 71% of Americans say they miss a restaurant or bar, 61% say they miss shopping at a store, and 52% say they miss a movie theater. .. An increasing proportion of people are planning to dive into vacations, clothes, cars and sporting events when things get back to normal. Fifty-nine percent say they will be vaccinated against COVID-19 to fly again. Inventories of airlines, cruise ships, and other face-to-face industries have skyrocketed after the news that the COVID-19 vaccine works.

Places that put the virus under control have already seen some impressive rebounds on travel and leisure. In China, for example, domestic airline travel soared after the country closed. Tickets sold out in minutes when Shanghai Disneyland reopened.

When we control the pandemic, the sickening demand can even turn the head back with more baby’s heads. For example, studies have shown that after the Spanish flu reduced births, in countries like Norway, a baby boom occurred when they recovered.

Beyond the resurgence of babies and baseball, researchers believe that the end of the Spanish flu was the “speculative orgy” that helped create the boom in 1919.

But before it was completely disappointing, the short boom following the Spanish flu ended in 1920 with a nearly forgotten crash. Then we entered the Roaring Twenties with happy flappers and fedora hats.

By the way, Babe Ruth, who seems to have suffered the Spanish flu twice, broke the American League home run record in one season following the virus. But the Red Sox then exchanged him for the Yankees. One season caused a pandemic and the next brought the Curse of the Bambino. painful.

Did you enjoy this newsletter segment? Well, it looks even better in your inbox!You can do it Sign up here..

What I learned about pent-up demand in 1919: Planet Money: NPR

Source link What I learned about pent-up demand in 1919: Planet Money: NPR

Show More

Related Articles

Back to top button