What Taylor Swift Can Teach Us about Economics

Full disclosure: I know the lyrics, I trade the friendship bracelets, and I’ve seen her in concert too many times to count. Thanks to Swifties like me, the pop sensation’s influence isn’t just cultural—it’s also economic.

In fact, anyone can “Swiftify” numerous topics for classroom or family dinner table economic conversations. Economic education resources from the St. Louis Fed and other Reserve banks can help with the discussion.

Let’s dive deep into “Swiftonomics.” For even more fun along the way, see if you can spot the references to 13 Swift song titles and lyrics. The answers are at the end.

Supply and Demand

Taylor Swift tickets are a great example to work with when talking about foundational economic topics. Let’s take supply and demand. The demand for an item is the quantity of a good or service that buyers are willing and able to buy at all possible prices during a certain period.

• The number of tickets—the supply—is determined by the size of the venue and the number of concerts played in each city on a tour.
• The demand is the voracious appetite for Taylor Swift tickets.

This combination of limited supply and sky-high demand pushed up prices.

Consider that the actual ticket price (or face value) paid by an original buyer was on average $204. This creates an opportunity for people to engage in arbitrage—which is the simultaneous purchase and sale of goods or services to profit from a difference in price. Buyers could purchase tickets at face value and resell them for a much higher price in the secondary market.

How high have prices gone? The average resale price for an Eras tour ticket was nearly $4,000. Some reports showed tickets listed for up to $20,000. (Those untouchable prices are hard for fans to shake off.)

Scarcity and Opportunity Cost

When it comes down to it, we live in a world of scarcity, and it seems like there will never be enough Taylor Swift shows to satisfy her fans’ wants. Scarcity—this is why we can’t have nice things. With scarcity acting as a driving force, and Swifties’ astronomical levels of demand, ticket prices for the “The Eras Tour” soared on the secondary market.

Teachers, you can use this example to frame conversations around decision-making and opportunity cost, the value of the next best alternative when making a decision. Ask students, “Would you rather have tickets to ‘The Eras Tour,’ or a brand-new car?” The answers might surprise you. The St. Louis Fed’s lesson Making Choices and Identifying Costs can help bring this conversation to life in your classroom.

Incentives

In economics, it is important students understand how people respond to incentives, or perceived benefits that encourage certain behaviors. A great example of that is Taylor Swift’s deal with the nation of Singapore this past spring. In this deal, Singapore incentivized Swift’s team by subsidizing the shows, in exchange for making Singapore the only Southeast Asia stop on the “The Eras Tour.” All she had to do was stay in Singapore! Swift’s team agreed and played six shows, with Singapore Prime Minister Lee Hsien Loong saying it was “a very successful arrangement.”

Trade

Swifties created a new tradition this tour and brought friendship bracelets to each show to trade with other concertgoers. In my opinion, this cute trend is never going out of style, with the bracelets generating over $3 million in Etsy sales in 2023, as Time magazine reported. The publication that year named Swift “Person of the Year.”

Beyond the economic effects, the bracelets provide educators and parents with a simple way to demonstrate mutually beneficial trade agreements. When you swap bracelets with other Swifties, you gain a new bracelet, enjoy someone else’s creative vision, and likely make a new friend! You are both better off, demonstrating that trade is not a zero-sum game. If you want to go beyond trading bracelets, check out the activity, Is Trade a Zero-Sum Game? The Answer Lies in Candy from the St. Louis Fed.

Attendees of the St. Louis Fed’s Women in Economics Symposium also have a chance to trade econ-themed “Fedship” bracelets this coming spring. How gorgeous is that? If you are interested in getting in on the action, you are not on your own, kid. Register and be sure to make the friendship bracelets!

Competition and Market Structure

Tickets for the “The Eras Tour” went on sale in November of 2022, but acquiring seats was not as straightforward as you might think. From overwhelming website traffic and high prices to not even getting a chance to purchase tickets, Swifties battled a great war attempting to secure their seats amidst high levels of competition.

However, there was only one initial seller of tickets—which meant that seller had a lot of market power. The issues led to the Department of Justice filing a lawsuit against Live Nation Entertainment Inc. and its subsidiary, Ticketmaster. The civil antitrust suit claims that Live Nation “unlawfully exercises its monopoly power,” resulting in higher fees for fans, among other issues, according to a DOJ press release. Teachers, expand on the market structures conversation with your students using the St. Louis Fed’s Teaching Market Structures lesson.

Economic Growth

Fans traveling to attend Eras concerts have been widely credited with increasing revenue for tourism industries in host cities.

One source told authors of the Federal Reserve Bank of Philadelphia’s report (PDF) for the Fed’s June 2023 Beige Book that Swift’s concerts in Philadelphia boosted local hotel revenue. (The Beige Book is intended to add anecdotal context to other data and analysis economists use to gauge how the economy is doing.) In fact, research showed the average fan spent approximately $1,300 to attend each concert. Call it what you want, but that’s a serious economic impact.

However, while it’s true that Taylor Swift fans are spending billions of dollars and businesses are reaping benefits, it’s important to note that Taylor Swift spending is not necessarily adding billions of dollars to the national economy. Rather, the dollars Swifties spend on concert tickets and swag may be money they are not spending somewhere else in the economy.

Labor Markets

Thanks to Swift’s “Eras Tour,” it was not a cruel summer for anyone seeking part-time employment. The shock to local economies when Swift dropped by increased demand for part-time labor. When Swift toured in Boston, the city noted a 1,000% increase in demand for part-time hourly workers within a half mile of the show, as the Time magazine profile noted. Additionally, a special report from the California Center for Jobs and the Economy estimated that her six sold-out shows would give “a $320 million bump” to Los Angeles County gross domestic product, or GDP, and employment would increase by 3,300.

Interested in learning more about the supply and demand of labor? Check out “The Labor Market” from the St. Louis Fed’s Economic Lowdown Video Series.

Now for the Outro

When it comes down to it, we live in a world of scarcity, and I can confidently say there will never be enough Taylor Swift shows to satisfy all her fans’ wants. But there is enough from Taylor Swift to teach economics and make it a bit less treacherous. Next time you are struggling to come up with creative econ examples in the classroom or with your friends and family, fill that blank space with some Swiftonomics.

Did you find all the references to Taylor Swift song titles and lyrics? Here’s the list:

1. Untouchable
2. Shake It Off
3. This Is Why We Can’t Have Nice Things
4. All You Had to Do Was Stay
5. ’Cause we never go out of style, we never go out of style. (From the song Style.)
6. Gorgeous
7. You’re On Your Own, Kid
8. So make the friendship bracelets. … (From You’re On Your Own, Kid.)
9. A Great War
10. Call It What You Want
11. Cruel Summer
12. Treacherous
13. Blank Space