Taylor Swift is taking Europe by storm, prompting some experts to believe her performances could boost the continent’s economy, according to Reuters.
The unforeseen economic benefits of Swift’s performances, along with the Olympics in France and the 2024 European Football Championships in Germany, are expected to stimulate an economically sluggish Europe that has barely sidestepped recession and lagged far behind the United States.
Despite fans flocking to dozens of sold-out shows from Dublin to Vienna and beyond, “Swiftonomics” is just an overblown myth. The singer may even revolutionise the music industry, but once the hype wave subsides, it becomes clear that the economic benefits of her work are hardly visible across an entire continent.
In May, about 180,000 fans attended her three performances in Stockholm. Half of them came from abroad and brought the city a turnover of about 850 million kronor ($81 million). That was a superb result for Stockholm, but even that was not visible to the Swedish economy, which ranked eighth in the European Union with an annual output of $623 billion, Carl Bergkvist, the Chief Economist at the Stockholm Chamber of Commerce, noted.
This extra turnover is a great weekend boost for Stockholm and in particular, its tourism sector. But it’s just that — a weekend, with no visible or significant impact on overall economic growth.
The Chamber estimates that hotels and restaurants have made a furore, with even sales of cowboy hats up 155%. However, the impact on prices is also imperceptible and may even be less than when Beyoncé performed in the city the year before. Whether Beyoncé was involved or not, inflation in Sweden has since fallen from 10 per cent to just over 2 per cent. Carsten Brzeski, an economist with ING, stated:
Is there a Taylor Swift effect? It’s extremely small and temporary, at best. There is copious research in the run-up to big events outlining the economic benefits but after the fact you need a magnifying glass to find these so-called benefits in the numbers.
Impact on economy
The situation is the same for the Olympics or Euro 2024. They are favourable for restaurants, beer sellers, and “merch” sellers. However, such events did not have a lasting impact on consumption patterns, Professor Simon Shibli at Sheffield Hallam University explained.
The consumer spending that occurs is expenditure that would happen anyway and tends to be a form of substitution.
Money spent on a concert ticket or hotel room simply substitutes for other expenses, leaving less for restaurants or travelling, according to Danske’s Piet Haines Christiansen.
On a micro level, such events do provide a boost but even that is small and temporary. They are relevant for specific sectors, like for hotels and catering wherever Taylor Swift goes or for beer sales in countries that are playing football.
Last month, some local media grasped at Barclays’ research into Swifties’ purchasing habits. They suggested that her concerts would generate one billion pounds for the British economy.
However, besides the likely substitution effect they will have on other spending, there is also the fact that most of the revenue from the tour of Taylor Swift will end up in the United States. This negates the already small local economic benefit.
