“It’s me. Hi. I’m the Impact it’s me!”: A Parker Philips take on Swiftenomics

When the Federal Reserve of the United States releases an economic impact study on a summer concert tour, we should all probably pay attention. That is the kind of recognition Taylor Swift’s summer 2023 “Eras” tour has garnered around the country. Spanning 18 states and 23 cities, the tour sold more than 3.6 million tickets as reported by Ticketmaster. Some cities, like Pittsburgh, experienced a tourism rush not seen since before the Covid-19 pandemic: one local hotel employee went so far as to say, “I haven’t seen us this booked in years, the Steelers and Penguins are one thing, but this is something entirely different.” Being the curious researchers and economic analysts that we are (as well as proven “Swifties”), Parker Philips’ economic impact team built a study using our modeling approach and IMPLAN to see if we could recreate the Federal Reserve impact and to answer a key question; what kind of an impact did Swift’s historic tour have on the United States’ recovering tourism industry?

Using our own statistical models made possible by the IMPLAN software, we were able to assess the direct, indirect, and induced impacts of the “Eras” tour on the nation’s tourism industry. Every $1 spent by a concertgoer counts as a visitor dollar spent on the local economy; this is the direct effect. The presence of that $1 requires a change in business-to-business spending within the supply chain of a particular industry. In other words, the act of a Swift fan spending $25 on a shirt or $360 on a ticket requires the production company to spend some portion of that producing the shirts or marketing the concert. These are the indirect or “multiplier” effects that give us a better picture of the nationwide tourism ecosystem. Finally, the induced effects are the household impacts realized as a result of supply chain spending effected by the $1 spent by our Swift fan. Maybe they ate at a restaurant, stayed at a hotel, or visited a museum; no matter what exactly they did, each of these institutions obtained extra business as a result of the “Eras” tour coming to town. The summation of all three of these effects gives us our total short-term tourism impact which, in this case, was valued at $4.6 billion! Many of the local economies that reaped the benefits of this $4.6 billion-dollar impact owe Taylor Swift and her tour a lot of friendship bracelets.

Around the country, the “Eras” tour has infused $4.6 billion in a tourism industry in need of a boost post-Covid. What’s more impressive is that, if anything, our result of $4.6 billion is a conservative estimate because of the way our study was conducted. Unlike other studies of this economic phenomenon, our model does not include the price of a concert ticket even though the $300 average price would give a gargantuan boost to any model. However, the price of a concert ticket does not contribute to the rest of the tourism industry and, therefore, cannot be included. Our model also assumes the average daily rate for hotels around the country to be $260 as reported by Statista, but rates most likely skyrocketed in response to the presence of the “Eras” tour and the fans that follow it. Even if our estimate certainly could have been larger, we feel confident our result of a $4.6 billion short-term impact is not only wildly impressive, but statistically sound and replicable.

But that’s not all, as Swift was capping off her summer tour with shows in Los Angeles early in August, she forever changed the lives of 50 employees who had worked for the production throughout the summer. Swift donated $100,000 to each of her truck drivers as a token of her appreciation for their hard work during the tour. Here at Parker Philips, we wondered how such a bonus would impact working class families in today’s economy. Our household impact model works similarly to our economic impact model with the key difference being that the original amount being infused (the direct impact in the original model) is used for household expenses instead of the tourism industry. We found that $100,000 to each truck driver results in around $200,000 of actual impact; a 2x multiplier! None can doubt the massive effect Swift’s “Eras” tour had on the music industry, but the resurrecting effects of its economic and household impacts will be felt for years to come. She might be the “problem” as alluded to in her song, but this summer, she is certainly the solution.

Authored by: Nichole Parker , Kyle McMillen , and Nicholas Devlin