CNN Claims ‘Tourflation’ Affecting Economy

In recent years, we’ve seen skyrocketing ticket prices to Taylor Swift and Beyonce concerts, and a recent article from CNN suggested that these superstars might also be contributing to inflation and GDP growth.

According to Klaus Baader, the global chief economist at Societe Generale, their respective tours are having a macroeconomic impact. “It’s not just that the tickets become more expensive,” said Baader. “It’s also that your beer or cider or your Coca-Cola or your hot dog at the venue has also gotten a lot more expensive.”

The “tourflation” is also driving up prices for local businesses. Hotel prices surge when Swifties (fans of Taylor Swift) visit cities for concerts, drawing the ire of local residents and other travelers.

But are we really seeing evidence of inflation? It’s a tricky question to answer, particularly because there are multiple definitions of the term. But the answer may be “no” regardless of the definition.

While prices are constantly changing due to factors like shifts in supply and demand, these changes don’t necessarily mean inflation. Consider the case of the Ford Lightning. In June, Ford slashed the price of its electric pickup truck by $10,000, citing lower-than-expected demand for electric vehicles.

According to The Economist, inflation is defined as “a general and sustained increase in prices,” and that concerts, theatre, and cinema have a weight of less than .8% in the basket. This means that the price increases associated with “tourflation” may not actually count as inflation.

In fact, many economists still believe in the simpler definition of inflation: an increase in the money supply. Making more money available creates more demand without a corresponding increase in supply, leading to higher prices.

Inflation may be a policy, according to economist Ludwig von Mises, but it’s not one that we can blame on Beyonce and Taylor Swift. Rather, it’s a deliberate policy created by policymakers who think printing more money is a lesser evil than unemployment.

So while Beyonce and Swift are undoubtedly having a major economic impact with their tours, there’s less evidence to suggest that they are responsible for inflation. People are paying more for tickets, hotels, and snacks near the venue, but it appears that these changes are being driven by factors other than an increase in the money supply.


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