Taylor Swift and the Economics of Terrorism
Today, we have a special edition of our newsletter that combines three of my favourite things: Taylor Swift, terrorism, and economics. I know you’ve probably come to expect nothing less from me than this level of nerdery. We’re taking a close look at what happens when a major economic event like a Taylor Swift concert gets cancelled for counterterrorism concerns and how this might be mitigated in the future. I hope you find this insightful.
On 8 August 2024, Austrian authorities cancelled three Taylor Swift concerts, saying that they had disrupted a terrorist attack planned for the Vienna leg of the tour. Three people have been arrested in connection with the plot, and two of these individuals had recently pledged allegiance to ISIL.
The Taylor Swift concert plot illustrates how terrorists can cause serious damage even when their plots are disrupted, and makes a strong argument for more and sustained investment in counterterrorism to protect both people and economies.
There have been plenty of terrorism arrests in Europe this summer, and this appears to be one of the more developed terrorist plots. Explosive devices and detonators were found at the home of one of the suspects, as well as ISIL propaganda, €21,000 in counterfeit money, machetes, knives, and more. Some of the cell members also demonstrated indicators of mobilization to violence, like quitting a job and changing their appearance. The plot is attributed to ISIL-Khorosan Province, although it is unclear what role the group had (inspiration, coordination, direction, etc). Learn more about ISIL-KP financing here.
Austrian authorities claim to have neutralized the threat but still cancelled the concert series without explaining further. (If all of the individuals in the cell had all been arrested, it’s unclear why the concerts couldn’t proceed.) UK concerts planned for this week are going ahead.
As a dedicated Swiftie (albeit one that cannot handle large crowds and will not be attending the concert, given my career in counterterrorism…), this plot caught my immediate attention, and not just because it was a potentially high-casualty attack. Plenty has been written and said about terrorists targeting concerts and the threat from ISIL-KP. Some good analysis can be found here, here, and here, as well as our own insights into the recent Crocus City Hall attack.
This particular incident caught my eye because I’m very interested in Swiftonomics, the economic phenomenon that occurs when Taylor Swift comes to town. Her concerts bring millions to local economies. For instance, the Eras Tour was estimated to increase Los Angeles County GDP by $320 million, and another analysis estimated that the tour could generate $5 billion for the US economy.
In Japan (a more representative country than the US, particularly in comparison with Austria), Swift’s Tokyo shows brought in between $50 and $60 million per night. These estimates include everything from hotels to restaurants to taxis and airfare. It’s no question: Taylor Swift is an economic force.
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When terrorism succeeds
So what happens when those concerts get cancelled?
In the case of Vienna, the economic damage caused by the cancelled concerts was mitigated because they were cancelled so close to the planned date. Many fans had already travelled to Vienna, and instead of going to the concert, they spent money in restaurants, on souvenirs, and other experiences to make up for not seeing the concert.
However, plenty of concertgoers didn’t bother coming to Vienna, cancelling travel plans, hotels, and restaurant reservations. As a result, Vienna likely lost millions of dollars in revenue—possibly as much as $100 million.
Despite the fact that the terrorist plot was disrupted, the terrorists still managed to inflict serious damage on Vienna and Austria’s economy. This is interesting because most of the literature on the economics of terrorism considers the economic impacts of terrorist campaigns (multiple terrorism incidents) or the impact of a single (successful) terrorist incident. We have little knowledge of the economic impacts of disrupted plots. Most of the time, insufficient details are released to understand what terrorists are targeting (and how), and disrupted plots are rarely covered extensively in the media, which mitigates potential economic losses from these plots.
However, this case is quite different. Given its high profile and impact, this is clearly a subset of the economics of terrorism worth studying. I struggle to think of another disrupted plot that could have cost a local economy more than a few million dollars, let alone the tens or hundreds of millions we are talking about in this case.
Understanding these economic impacts might also help us make better choices about counterterrorism, like how much we allocate to prevention and disruption. It’s impossible to say why the Austrian authorities cancelled the concerts (if there was an ongoing threat, for instance). Still, surely, these economic losses will make the case for more investments in counterterrorism that would make the country and Vienna more resilient against terrorist threats.