Taylor Swift performed on stage at Lumen Field in Seattle on July 22, 2023.
Matt Hayward/tas23 | Getty Images Entertainment | Getty Images
The devil is in the details, but Taylor Swift is a friend of the local economy.
The American pop star spent nearly a year on her ambitious Eras tour, traveling across the United States and around the world. The economic effect of the “Karma” singer’s performance has attracted everyone’s attention United States Federal Reserve to Wall Street.
A new report from Japanese investment bank Nomura says her travels undoubtedly helped the local economies she visited. But the company questioned how much of an impact it would have on national data.
“Her stimulus to consumption has undoubtedly fascinated U.S. economic analysts, but we think the overall macroeconomic effect may be overstated,” Nomura Global Economist Si Ying Toh wrote in a letter to clients last week.
Nomura estimates that from the first quarter of 2023 to the third quarter, Swift’s joint venture alone will increase U.S. item retail sales by 0.03%, while real gross domestic product, a measure of economic output, will increase by 0.02% .
The 14-time Grammy winner’s tour accounted for 0.5% of nominal spending growth for all of 2023, according to the company’s calculations.
While these data points could be considered trivial, Toh said that for the 20 U.S. cities she visited, economic growth — some called it “rapid improvement” — was “undeniable.”
STR data cited by Toh showed that accommodation prices at stops on The Eras Tour increased by 2.1 percentage points during Swift’s visit. Data from hotel booking platform Trivago shows similar growth, she added.
Taking Chicago specifically as an example, Toh estimates that accommodation prices increased by 3.1 percent due to Swift’s three performances in Chicago. During Swift’s tenure in the city, the third most populous city in the United States, occupancy increased by 8.1 percentage points and hotel revenue per available room increased by 59%.
Since then, the Illinois city’s consumer price index has risen 0.5 percentage points just because of the singer’s visit. CPI is a measure of a basket of goods and services that calculates changes in costs over time.
Toh said these local improvements were unlikely to materialize in national-level statistics for larger economies such as the United States, Britain or Japan. Still, she said, these events deserve attention as potential economic catalysts for countries around the world.
Internationally, Zhuo said small economies such as Singapore and Sweden were likely to get the biggest macro boost from her visit.
“Exogenous shocks play a key role in economic models, whether they are extreme weather events, epidemics or … pop concerts,” Toh wrote to clients. “In recent years, concert tours have not only become a major social phenomenon, but may also become an important driver of economic activity.”
Swift’s tour will end in late 2024. The film version has grossed over $200 million at the global box office through theaters and will begin streaming on Disney+ on March 15.
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