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Singapore’s Concert Rage

By: Shayan Mukherjee

Caption: The arrival of prominent international superstars like Taylor Swift, Jacky Cheung, and Coldplay continues the massive influx of concerts from popular artists in Singapore. These events have turbocharged the nation’s tourism sector and exports, serving as a boost for Singapore’s balance of payments.

When the first batch of tickets for the Taylor Swift concert were put up for sale in July this year, they vanished within a record-breaking 8 hours. Commanding a ferociously loyal fanbase, the international superstar has a penchant for drawing in large crowds and boosting revenue for ticket providers. The Singapore leg of her Eras tour, scheduled to make an appearance for 6 nights in March 2024, raked in a colossal $17.5 million per night in the initial sale (according to the Straits Times). This does not even account for the revenue enjoyed on secondary markets, where individuals can offer their tickets on digital platforms like Carousell and Lazada at exorbitant rates. Regardless, the sheer magnitude of the benefit to the Singapore economy boggles the mind. Why does “Swiftonomics” have such a substantial impact on the financial state of a nation? How is it so effective in the first place?

Concerts from international artists don’t just impact the domestic entertainment industry - the initial stimulus have a ripple effect on several other aspects of the economy. As her upcoming Singapore performance is the only stop in South East Asia on Swift’s tour, the event is proving to be the most convenient opportunity for fans across the continent to enjoy the experience. This has led to an increase in revenue in the tourism sector, with many consumers purchasing airline tickets and increasing spending on accommodation just to catch the concert. Furthermore, this mass influx of tourists will cause consumer spending in industries like food, transport, and clothing, to rise. Therefore, while the concert acts as a direct injection boosting Singapore’s economy through its benefits for the merchandising and entertainment sectors, it will cause a proportionally larger increase in Singapore’s total national income, due to its ramifications on a whole host of other industries, including tourism. This phenomenon, where an event that injects revenue into one or two specific industries impacts the overall economy on a much larger scale, is called the Multiplier Effect, and explains the overarching benefits of concerts like the Taylor Swift Eras Tour.

Another advantage of these concerts is the massive benefit it provides regarding Singapore’s position in international trade. The Balance of Payments is a statistical measure of the amount of money flowing into a country compared to the amount of money flowing out of it: in other words, it compares the goods exported and imported by a nation. While it may seem counter-intuitive, tourism is a type of intangible export: when people travel to a country, all of their expenditure represents money flowing from abroad into an economy. Therefore, the total value of Singapore’s exports will rise, reducing their current account deficit (the difference between the value of their imports and the value of their exports) and allowing them recoup any national debt that they might hold.

But how is “Swiftonomics” allowed to blossom into this financial pandemonium from the outset? The answer lies in the reputation (no pun intended) and brand image of artists like Taylor Swift. Due to the loyalty of the Swifties and the scarcity of tickets in comparison to the number of people willing to purchase them, consumer demand for the tickets is extremely price inelastic. Price Elasticity of Demand is a measure of how responsive consumers are to changes in price - in other words, as the price of the ticket increases by an extremely large percentage, people are still willing to purchase the good due to their belief that it is a worthwhile, once-in-a-lifetime experience, meaning that the quantity demanded falls by a proportionally smaller percentage.

And what of the downsides of this ticket-buying frenzy? Some economists, such as those interviewed by Today Online, argue that the concerts could potentially cause an increase in inflation, as the high levels of demand could force price levels to rise. However, this is unlikely. The occurrence of a Taylor Swift concert is unlikely to impact the levels of demand for staple goods that Singaporeans frequently consume; the event is temporary, and will not have a permanent impact on price levels across the board in the nation.

Therefore, concerts from international superstars in Singapore lend the economy several advantages while having minimal downsides. While the artists continue to entertain locals, the benefits to the economy might just steal the show altogether.

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