The economics of Taylor Swift: How Taylor’s tour boosts local economies and creates fan frenzy

Swift’s Eras Tour has inspired millions of fans to seek alternative routes, such as barter and the secondary market, in search of tickets. Facebook groups, reseller apps such as StubHub and SeatGeek, and Twitter matchmaking accounts have become the preferred platforms for fans seeking to attend highly sought-after concerts.

This weekend, Swift will grace the stage for three shows at MetLife Stadium in New Jersey, with tickets starting at around $1,000 on the resale market. With a stadium capacity of 82,500, 1.25 million people would have the opportunity to watch her perform in a single weekend.

Taylor Swift’s tour has become a fascinating case study in the dynamics of supply and demand. Like the frenzy that followed a highly anticipated IPO on Wall Street, individuals securing multiple tickets through Ticketmaster quickly found eager buyers for their coveted assets. While some may label these sellers as scalpers, others see them as savvy capitalists who seized the opportunity to not only recoup their initial investment but also rack up significant profits. Amazingly, fans were willing to spend thousands of dollars for tickets that initially cost as little as $49 plus fees.

In economic terms, this reflects elasticity of demand, where demand remains high even when prices rise. In this particular case, demand is fueled not only by the anticipation of Swift’s performance but also by the desire to seize the savings accumulated during the pandemic and the day after the pandemic.

According to Bloomberg, Swift is reaping the rewards of her highly anticipated tour. Each concert is estimated to generate over $10 million, with ticket sales ranging between $11 million and $12 million per concert. The economic impact of Swift’s tour is undeniable.

Twitter accounts such as “Eras Tour Resale” have also sprung up, amassing over 150,000 followers by connecting fans with sellers willing to trade verified tickets without profiting from the transaction. These accounts offer a glimpse into the staggering demand levels. Real fans often forgo the markup when they have extra tickets, contributing to the limited availability of face value tickets. On average, his page receives about 20 to 30 tickets per week, while it has more than 2,000 responses from potential sellers. Demand is undeniably sky-high.

Bartering has become another notable feature of “Swiftonomics”. Some fans have resorted to creative exchanges to secure tickets, such as offering the use of a wedding venue worth $4,000 per day or a year’s worth of free pizza in exchange for two tickets.

Others take a risk by showing up at concert venues without tickets, hoping that the resale value will drop closer to concert time. However, in many cases, the prices remain too high, and desperate fans are left to be disappointed.

The power of Swift’s fan base, known as Swifties, is not only reshaping the music festival experience but also having a significant impact on local economies. During her Las Vegas concert, tourism reached pre-Covid levels in March, and cities across the country, from Atlanta to Boston, experienced a surge in hotel and restaurant bookings whenever she hosted the Eras Tour.

According to a study by Live Nation Inc., Ticketmaster’s parent company, for every $100 spent on concert tickets by an out-of-town fan, the local economy benefits an additional $334 in consumer spending. Many Swifties are spending over $100 to show their dedication to their favorite artist.

While some parts of the economy have cooled off since tickets for the tour went on sale early in November, Swifties’ desire to splurge remains strong. His spending habits have puzzled economists, who were expecting greater caution in the post-pandemic era. The ability of Swift’s fan base to defy expectations and spur economic growth is a testament to her resilience.