“Unlocking the puzzle: Taylor Swift’s influence on consumer spending sheds light on the enigmatic labor market dynamics.”
The “lipstick effect” is a phenomenon that explains how consumers tend to opt for more affordable luxury items when they feel strained financially. Instead of purchasing expensive items, they choose to buy more affordable ones that still provide a sense of luxury. This effect can be seen in various industries, including the entertainment sector.
Despite concerns of a potential recession, the jobs numbers in September showed a strong performance, particularly in the leisure and hospitality sectors. This can be attributed to the high demand for experiences following the COVID-19 pandemic. People are still eager to attend concerts, shows, and other entertainment events.
The top-grossing concert tours in the US this year, including Taylor Swift, Beyoncé, and Ed Sheeran, have collectively generated $1.48 billion in ticket sales. This is a significant increase compared to previous years, with a rate of change of over 200% between 2019 and 2023. The average ticket prices have also increased, contributing to what media and entertainment analysts term as “funflation.”
The demand for concerts and live events has resulted in the need for thousands of employees to handle the crowds. These employees work in various roles, such as site management, ticket collection, merchandise sales, and security. As a result, the hospitality industry has seen job gains in recent months.
This consumption wave in the entertainment industry may also be influenced by factors beyond the post-pandemic urge to gather in person and the popularity of certain artists. It’s worth considering what Americans are not buying, such as new homes and cars. Potential buyers who feel priced out by high rates may choose to splurge on concert tickets instead. Home purchases require a hefty down payment, and those funds may earn a decent return in the bank. Similarly, financing a new car comes with higher rates, so waiting with an older model may be a more cost-effective choice.
In conclusion, the “lipstick effect” is not limited to buying affordable cosmetics but extends to the entertainment industry. Consumers are opting for affordable luxury experiences, such as concerts, instead of making more significant purchases. This trend is reflected in the strong jobs numbers in the leisure and hospitality sectors, indicating a continued appetite for experiences among consumers.