Did Taylor Swift’s Eras Tour Improve the Economy Wherever She Played?

No one can question singer-songwriter Taylor Swift’s business acumen; however, the reported Midas Touch effect that her 2023 Eras stadium tour has had on local economies is questionable and deserves greater analysis, according to one expert.

“She is a remarkably good business person. Re-releasing select albums is absolutely genius and how she structured her Eras Tour is brilliant,” said Victor Matheson, professor of economics. “However, the data on the economic impact for local communities is not clear and is more perception than reality.”

In July, Common Sense Institute reported that Swift’s U.S. tour “could generate $4.6 billion in total consumer spending.” The Wall Street Journal has reported that the entire U.S. leg of the tour could have a $5.7 billion boost to the nation’s economy. This is possible, Matheson said, but the vast majority of that money is from ticket sales and is going directly to Swift and her tour employees, not local businesses and municipalities. And while hotel prices in the tour areas have tripled and hotel occupancy rates reached 100%, as reported by Booking.com, those singular events might help in the month they’re booked, but should not be credited with bolstering local economies, Matheson said.

He noted the vast majority of people attending her shows are local to the host region and have most likely spent most of their budget on tickets and concert merchandise. For this reason, they are not spending on items such as eating out and hotels.

A 2022 study by Matheson, Robert Baumann, professor of economics, and former research assistant Jack Muldowney ’22 tracked utilization of 148 major athletic venues in 56 cities, partially considering investment in local economies around large events held between 2000 and 2019. The paper analyzed how to measure tourism associated with sports and non-sporting events in large arenas near downtowns. It reported that there was not a significant monetary effect on local businesses aside from bumps in hotel occupancy rates.

“Most economic impact studies do a good job of adding and multiplying, but not a good job at subtracting,” Matheson said. In short, money spent tailgating shouldn’t count in an economic study because it’s not revenue invested in a local business. The restaurants, bars and shops might see extra revenue the day of a large event, but that also means there is less money that would have been spent on multiple trips to those same establishments over a period of time.

“We know that some Swifties traveled, but when the majority of the people attending her shows are local that means local people are spending their money on items related to the concert itself, such as tickets and merchandise, and that they will have less money to spend at the Worcester Public Market or a concert at The Hanover,” he said.

Matheson likened the Eras Tour shows to the Super Bowl or other large event coming to town and vacuuming up local dollars. 

“If you spend a dollar locally, that money will recirculate in the local economy. When you spend money on concert tickets and merchandise, that is money that doesn’t stick in the local economies. It goes home with the artist,” he said. “Spending was most likely down after a big splurge on Swift concert tickets, parking and buying merchandise within the venue.” 

That doesn’t mean attending an Eras Tour concert, or the Super Bowl, are bad for local businesses. All can create a short-term financial windfall for restaurants, merchants and temporary employees hired to work the events. The Wall Street Journal reported that there was a 1,000% increase in demand for hourly workers within a half-mile of Swift’s Gillette Stadium shows in May 2023. That one-off infusion of revenue is good, but doesn’t translate into significant economic gains.

In the end, an individual’s decision to invest the Eras Tour experience — according to a survey by QuestionPro cited by the Wall Street Journal, the average Swift fan spent an estimated $1,300 show on tickets, travel, merchandise, food and outfits — and how they spent their money is theirs alone.

“I have nothing bad to say about Taylor Swift herself. She is generating and providing happiness, and people are willing to pay any amount for that. There is value in that, too,” Matheson said.