Welcome to ‘Swiftonomics’: What Taylor Swift reveals about the US economy

Swifties represent an extreme version of turbocharged consumers who are willing to splurge on anything they miss out on during the pandemic.

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Accusations of increased demand, limited supply, price gouging and monopoly. And a customer willing to pay almost anything.

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Welcome to Swiftonomics.

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Taylor Swift’s 52-concert US tour has all the ingredients for a post-Covid demand shock. Some resellers were reportedly asking $40,000 or more for concert tickets after a run on official sales last week, leaving millions empty-handed and willing to pay whatever it takes to get a seat.

Swifties, as the pop star’s fans are known, aren’t necessarily your average American, but they’re capturing the moment in the post-Covid economy. Even as a recession looms, many consumers are willing to spend on things they missed at the height of the pandemic — whether it’s travel or live entertainment.

Swift’s fans represent an extreme version of this turbocharged consumer: millions, mostly Millennials and Gen Z, who have waited at least four years to see the superstar live again, and who have emerged from the pandemic with a historically high savings rate.

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“Concerts are seen as an affordable luxury in times of crisis,” said Lisa Yang, an analyst at Goldman Sachs Group Inc., who publishes the bank’s annual Music in the Air report on the global industry.

Read more: Here’s the Real Reason You Can’t Get Taylor Swift Tickets

Currently, Swift’s The Eras Tour tickets are only available on the secondary market, and they aren’t cheap. About 2.4 million were sold last week before Ticketmaster ended the official presale. The ticketing company’s website collapsed under the pressure of nearly 14 million people trying to get a seat.

Among them was Melissa Kearney, an economics professor at the University of Maryland who is currently experiencing the basic laws of supply and demand firsthand. The mother of two Swifties, aged 12 and 15, said she was looking at secondary market prices because she couldn’t win tickets.

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“There’s nothing more they want in the world,” said Kearney, who runs the Aspen Economic Strategy Group. “Overall, the pandemic has changed the way people think about what’s really important to them and what brings them joy.”

Gustavo Coutinho, who had never seen Swift play live, came up with a budget of $2,000 after 10 months of saving. A 25-year-old consultant in Boston spent about $1,500 to attend two concerts. “I would give $3,000 if I had to,” he said.

In the early 2000s, the late economist Alan Krueger came up with the concept of “Rock Economics” to explain the economy through the lens of the music industry. Krueger often referred to Swift, who released her debut album at age 16 in 2006, as someone who toyed with strategies that boosted concert and product sales, calling her an “economic genius.”

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His students also agree. “It’s almost becoming an entire category,” said Carolyn Sloane, who teaches Rock Economics at the University of California, Riverside. “People really don’t see a great substitute for going to a Taylor Swift show. They really want to see him live, and I say that as a fan.”

Other artists, including Bruce Springsteen, have proven that fans are willing to pay high prices for mega live events post-Covid – recession be damned.

Meanwhile, Swiftonomics is a crash course on another concept: monopoly. Politicians and attorneys general seized the moment to criticize Ticketmaster, the dominant player in the live music industry.

As recently as last week, Ticketmaster and parent company Live Nation Entertainment Inc. were at the center of a Justice Department antitrust investigation into whether the platform abused its power, according to people familiar with the investigation.

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Live Nation said Ticketmaster is a leader not because of competitive business practices, but because of the quality of its platform. Ticketmaster apologized to Swift fans and said that it will work on its system in the future. Swift herself said it was “excruciating” to watch the mistakes happen.

Supply Mastermind

Ultimately, the singer is the person behind the delivery. He chose to play in high-capacity stadiums and added new concerts. Still, there is a frenzy surrounding his tours. “There’s often a sense that scarcity drives demand,” says Pascal Corti, an economist at Canada’s University of Victoria who studies ticket resale markets.

One of the biggest questions in the broader economy is whether consumers will continue to spend as interest rates and unemployment rise.

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Swiftonomics probably won’t help answer that. It’s its own economic microcosm, and fans just rock it.

“I’m wary of reading too much into people being willing to pay exorbitant amounts for Taylor Swift tickets in terms of what it says about the health of the U.S. economy,” said Kearney, Swiftie’s mother economist. “I’m more inclined to read that ticket demand for Taylor Swift’s die-hard fans is nearly inelastic.”

-With assistance from Ashley Carman and Reade Pickert.

(An earlier version of the story was corrected to remove a comment that Kearny said he would spend whatever he had to and was instead looking at secondary market prices.)

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