Taylor Swift’s European tour has been a delight to the fans and critics as well. With sold out shows from Dublin to Vienna some people feel she will help the economy. This excitement, coupled with such events such as the Olympic Games in France and soccer championship in Germany for Euro 2024, points towards an economic revolution for an area that has been in a state of recession.
A Temporary Solution and Not a Long Term Gain
Nevertheless, the idea of the so-called “Swiftonomics” is rather misleading. Taylor Swift’s concerts help the local economy by increasing the amount of money people spend for a short period of time, but the effects are not long-lasting. For instance, her three shows in Stockholm had an attendance of nearly 180000 fans; the turnover of nearly $81 million. This is a lot of money for a weekend but it does not even make a dent in Sweden’s $623 billion economy.
Local Gains, Limited Impact
Short-term gains are visible to local businesses especially the firms that operate in the tourism industry. Every business, from hotels and restaurants to specialty markets such as cowboy hat stores saw an increase. Carl Bergkvist, Chief Economist at the Stockholm Chamber of Commerce agrees with this boost but argues that it had a small impact to the overall economic growth.
The Broader Picture
ING’s Carsten Brzeski for instance says while big events are expected to boost economies, the effects are insignificant. This is evident from past records, where people have a tendency of perceiving economic gains from occasions such as Olympics or Euro 2024 as being higher than real levels. The short bursts of spending do not add up to economic development.
The Substitution Effect
Sheffield Hallam University’s Professor Simon Shibli said that the spending related to these events often displaces other expenses. This implies that the amount of money that consumers spend on concert tickets or other events related purchases would have been spent on other goods and services hence no net effect on consumption.
Conclusion
Taylor Swift’s tour and similar events give short-term uplifts to certain segments such as accommodations and shops. But it is important to note that their effect on the economy as a whole is insignificant. The euphoria over “Swiftonomics” may grab the headlines. But a second glance shows that these advantages are short-lived and do not positively impact economic development.