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Rockets’ Red Glare
As many communities canceled Fourth of July celebrations and fireworks shows, more Americans chose to celebrate at home. This shift from public celebration to private parties led to a significant increase in firework sales. Some areas reported a doubling of personal firework sales over 2019. In Florida, a new law making recreational firework use legal on Fourth of July and New Year’s Eve are contributing to the growth of sales.
However, not everyone is excited about this increase in recreational fireworks. Several communities have seen significant increases in fireworks complaints to police, largely due to the noise.
Discussion Questions:
- Based on the increase in demand for recreational fireworks, how would you expect equilibrium price and quantity to change?
- Fireworks create negative externalities due to noise pollution and potential for fires. What policy options are available to reduce this negative externality?
- Given that firework displays are considered a public good, will the shift from public shows to personal recreational shows lead to more or less than the equilibrium quantity of fireworks on the Fourth of July?
