Why Is a Concert Ticket So Expensive

Live Design

The economic principle I am researching is demand, specifically for rock concerts. And how Prices are affected by complementary goods.

 Over the last decade we have seen a huge increase in the prices of concert tickets, specifically rock and roll concerts starting in 1997. Bruce Springsteen concerts are no exception. While it may seem anything but, the music industry like all others is governed by the laws of economics.

 There are many reasons that the price of concert tickets have gone up in recent years, but I will explore just a few today. When someone goes to a concert they usually will by complementaries, such as CDs, albums, t-shirts, ect. However in recent years music streaming services have taken over and sales of CDs and albums have dropped to almost zero. According to The Economics of Real Superstars: The Market for Rock Concerts in the Material World by Alan B. Krueger, ¨the decline in complementarities is the main cause of the recent surge in concert prices¨.

 This makes sense because if the amount of profits from commodities declined, artist must raise the prices of concerts if they want to have the same total profit. Even though Prices for Bruce Springsteen concerts are expensive often they can pale to other´s. Kruger cites that often ¨Springsteen, for example, sets his ticket prices well below their market Value¨. For some artists it is not all about the money.

 Artists are able to raise to price of concert tickets and people will still attend because for some superstars, the market for a rock concert is inelastic( According to Econlife.com), which means the demand curve is extremely steep because price will have little effect on quantity demanded. A good example of a markets elasticity is Springsteen on Broadway, which ticket prices for sold for more than Hamilton as prices soared above 500$.

 In my next blog post I will explore why people like the sound of Springsteen and why he has become so successful.