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The Economics of Real Superstars: The Market for Rock Concerts in the Material World

Author

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  • Alan B. Krueger

    (Princeton University and NBER)

Abstract

Beginning in 1997, the price of concert tickets took off, and ticket sales and the number of concerts performed by top artists declined. From 1996 to 2003, for example, the average concert price increased by 82 percent while the CPI increased by just 17 percent. This paper summarizes and seeks to understand trends in the concert industry from 1981 to 2003. Explanations that are examined include: 1) the possible crowding out of the secondary ticket market; 2) rising superstar effects; 3) Baumol and Bowen's disease; 4) increased concentration of concert promoters; and 5) the erosion of complementarities between concerts and album sales because of file sharing and CD copying. The paper tentatively concludes that the decline in complementarities between concerts and album sales is the main cause of the recent surge in concert prices and decline in ticket sales.

Suggested Citation

  • Alan B. Krueger, 2004. "The Economics of Real Superstars: The Market for Rock Concerts in the Material World," Working Papers 863, Princeton University, Department of Economics, Industrial Relations Section..
  • Handle: RePEc:pri:indrel:484
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    References listed on IDEAS

    as
    1. Rosen, Sherwin & Rosenfield, Andrew M, 1997. "Ticket Pricing," Journal of Law and Economics, University of Chicago Press, vol. 40(2), pages 351-376, October.
    2. James Peoples, 1998. "Deregulation and the Labor Market," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 111-130, Summer.
    3. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, January.
    4. Hamlen, William A, Jr, 1991. "Superstardom in Popular Music: Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 729-733, November.
    5. Orley Ashenfelter & Timothy Hannan, 1986. "Sex Discrimination and Product Market Competition: The Case of the Banking Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 149-173.
    6. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-858, December.
    7. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 1-41.
    8. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1169-1213.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    economics of superstars; complementarities; rock and roll;

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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