This text is taken from Courrier de l’ économique. Click here to subscribe.
Would you be willing to pay between $1,500 and $6,600 Canadian to attend one of Taylor Swift’s concerts at the Rogers Center in Toronto in November 2024?
If you are one or a fan die-hard, this corresponds to the range of the amount you would have to pay to go see your idol, according to the ticket resale site Stubhub. Otherwise, you could go see the film of his tour at the cinema and it would only cost you around fifteen dollars.
However, if you fall into the category of people who sigh, “Oh no, not Taylor Swift again!” “, you still have to recognize that the famous pop singer from Pennsylvania can at least make us think about the economy.
« Taylor Swift and her tour Eras Tour show the enormous purchasing power of consumers that still exists,” declared Brett House, professor of economics at Columbia University in New York, in an interview with the CBC last June.
The enthusiasm for its tour speaks to consumers’ thirst for experiences, after being deprived of them throughout the pandemic. But how long can this type of guilty (or even irrational) pleasure last, when a possible recession is on the horizon?
Going to a concert, expensive entertainment
If you think that attending a concert has become a luxury, you’re not wrong.
Let’s stay with the example of a Taylor Swift concert. Even if you managed to obtain a “code” allowing you to purchase a ticket for, say, 200 Canadian dollars, you then have to consider the cost of transportation to Toronto (around $140 for a round trip in bus from Montreal) and accommodation costs for at least one night (say $200).
However, even without considering these related costs, attending a concert is expensive. Or, at least, more expensive than before.
According to magazine data Pollstara benchmark in the international entertainment industry, the average price of a concert ticket in North America has doubled since 2009 to reach $120 US this year, or nearly $165 Canadian.
If the average price of a concert ticket had increased at the rate of global inflation over this same period, it would be more like $90 US this year, or $120 Canadian.
In other words, the cost of this entertainment has increased faster than the cost of living in general. But, at the same time, listening to music in our daily lives has become less expensive thanks to streaming platforms, whose repertoire is infinite and access is low-cost or free.
The invisible hand and the entertainment industry
There remains one unanswered question: how to explain the stratospheric levels that concert ticket prices can reach on the resale market – as is the case for Taylor Swift’s tour?
In his book Rockonomics, published in 2019, the late American economist Alan B. Krueger provided a possible answer. The former United States Deputy Secretary of the Treasury and professor at Princeton University explained in particular that many musicians fear being perceived as being unfair to their fans by making them pay too high an amount for their shows.
“This may push them to sell their concert tickets at a lower price than demand and supply alone would dictate,” he said.
“This concern for fairness, which suppresses prices and creates shortages, is the main reason why there is a large and sustainable market for ticket resale. We cannot understand markets or economics without recognizing that a mixture of emotions, psychology and social relationships interfere with the invisible hands of supply and demand,” argued the economist.
And you, what would be the maximum amount you would be willing to spend to see your favorite artist in concert?