If you’re like most runners, you’ve probably asked yourself why don’t the major marathons raise their entrance fee. Ok, you’ve never said that, if anything you’ve complained about the escalating entry fees for road races. Now I’m going to tell you why the major marathons should raise their entry fees.

The New York City Marathon has approximately 100,000 applicants; they accept 50,000 applicants, and around 36,000 will actually run the marathon. To apply one must pay $11, and if you get selected you are billed the rest of the entrance fee. If you’re name is not drawn, you are out $11.

Most of the other major marathons use first come, first served basis and they fill up fast. If you would like to run the Chicago Marathon, Twin Cities Marathon, or Marine Corps Marathon, you have to register in the spring, for a race that you will not even run until the fall. The simple fact of the matter is that if a marathon fills up in a few weeks, it’s priced too low.

So why don’t major marathons charge a higher entry fee? Today, in our lexicon, we use words like price gouging, greedy and corporations and usually corporation is preceded by the qualifier evil. Thus, the major races will not increase their entrance fee, even though they could, due to good will.

When supply is low, and demand is high, we have a few options. We can queue up, take applications, and hold a lottery, which is what NYC Marathon does. This is akin to the 1973 oil crisis, when gas stations were only allowed to sell you gasoline based on criteria involving your license plate number, thanks to Big Brother (price rationing). Next we have the first come, first served method. The USSR used this method, Venezuela is using it today in their state run grocery stores, it’s great if you are not price sensitive and it’s excruciating if you are time sensitive.

I want to talk about the free market solution, where supply and demand hit the sweet spot, otherwise known as market equilibrium.

My assumption is that the demand for major marathons is relatively inelastic, but at the margin, certain runners will no longer want to run the marathon as the price rises, this is why the demand curve is generally downward slopping.

The question that we have to ask is, what type of runner is less likely to run the marathon as the price moves up the Y-axis? My guess would be the less serious runner, or someone who has run that race before (veteran runner) or maybe the first time marathon runner. However, I would guess that the guy training year round for the marathon, running 60+ miles per week has a higher price tolerance (regardless of personal income).

I want to ensure that the runners running the major marathons truly want to be there, and the only way to ensure this is by raising the entrance fee. There are still plenty of other marathons out there, but if I want to run the NYC Marathon I’d like to have that option and not pin my hopes on the lottery.

Let’s say you ran the NYC Marathon in 2007 and you paid $400 to run it. How likely are you to run that race in 2008 at that price or higher? My guess is you would pay it once and move on to another alternative marathon the next year, a cheaper option, I know I would. That’s the problem; when the free market is not implemented people have no incentive to look for alternatives.