Expenditures on entertainment in 2022 outpaced income growth despite the steady rate of inflation. This has led to what some have termed “Fun-flation,” an unusual trend during this time of high prices.

Typically, consumers tend to tighten their wallets and reduce their spending as prices rise. However, economists have noticed an abnormal phenomenon: consumers are now spending more during times of inflation for leisure and entertainment activities. This January, U.S. consumer spending increased by the most in nearly two years. 

The phenomenon has been illustrated in American entertainment, as seen with the Taylor Swift Eras Tour. The average face-value ticket price for a Taylor Swift concert was $254. Before accounting for taxes and fees, these prices come in a range, usually from $49 to $449. As resellers and dates approached, attendees could expect to pay anywhere between $800 to $11,000 each on StubHub. 

In addition to concert prices, travel expenses for events have also risen. In the U.S., there has been a similar effect with hotel and airline prices soaring in cities where Taylor Swift performs.

Despite the concerns about the rising cost of groceries and gasoline, up 3.7% from last year, consumer spending increased by 9% in 2022. The cost of admissions and associated fees rose faster than the prices of essential goods such as food and gasoline in 2022. 

According to The Wall Street Journal, nearly 60% of Americans have had to cut back on their spending for live entertainment this year due to soaring costs. However, the survey also found that over 20% of Americans are willing to take on debt to sustain their ability to enjoy their favorite entertainment activities.

As of August, the Bureau of Economic Analysis indicates that Americans were on track to spend an estimated $95 billion this year on tickets for various spectator amusements, including movies, live entertainment, and sporting events, a 23% increase from the previous year.

Additionally, Americans continue to increase their spending on entertainment while the savings rate has decreased. Consumer spending rose 0.8% in July 2023, while savings fell 3.5%.

What we may be seeing is the diverging household experiences. The haves and the have-nots are weathering inflation in different ways. 

Angela Wentink, a 48-year-old mother who regularly went to concerts during her youth as a part of a lower-middle-class upbringing in Massachusetts, cannot afford to give her daughters the same experiences. After being laid off, she contemplated using her final severance check to take her daughters to see Taylor Swift. 

She quipped, “Do I do something that feels really irresponsible and take this check and make my daughter’s dreams come true?” In the end, she could not justify spending thousands of dollars for nosebleed seats.

“Fun-flation” is reshaping how we approach inflation. Despite rising prices for essentials, such as gas, some consumers are spending more on entertainment, as seen in the popularity of events like the Taylor Swift Eras Tour.