Image Credit: iStock
Understanding economics helps us make choices in our everyday lives—and the same is true for famous superstars! Even if one’s pocketbooks are deep like Taylor Swift’s, she still deals with scarcity and the opportunity cost of her time.
What does opportunity cost have to do with which of her two private jets Taylor Swift would choose to take to the Super Bowl?
Taylor Swift is in the midst of her worldwide Eras Tour concert, and she is performing back-to-back concerts in Tokyo, Japan, on February 7th, 8th, 9th, and 10th 2024. Taylor Swift’s boyfriend, Travis Kelce (tight-end for the Kansas City Chiefs) will be playing against the San Francisco 49ers in Super Bowl LVIII on Sunday, February 11th 2024 in Las Vegas.
Many Swifties and others have been concerned with whether Taylor Swift will be able to make it from her Eras Tour concert in Tokyo to Las Vegas in time for the 2024 Super Bowl. If she hops in a private jet directly after her last Tokyo show ends, she will be able to arrive in Las Vegas in time for the Super Bowl. (Keep in mind, Japan (JST) is 17 hours ahead of the time in Las Vegas (PST).
Now the question remains: How is Taylor getting from Tokyo to Las Vegas? Which private jet is she likely to take? The internet has been buzzing with speculation on how the mega star is going to get to Vegas for the Super Bowl.
Some have speculated that Taylor would be taking her Dassault Falcon 900 jet from Tokyo to Las Vegas, but that theory can be laid to rest. First, the Falcon 900 can’t make it non-stop from Tokyo to Las Vegas. Given that the distance from Japan to the west coast of the U.S. is just out of the Falcon 900’s reach, this jet would have had to make a fuel stop in Hawaii before continuing on to Las Vegas, and such a fuel stop would have been significantly out of the way. (The opportunity cost of Taylor’s time is already extremely high, and she certainly won’t want to be wasting time for a fuel stop in Hawaii when she’s trying to get to Vegas to cheer on Travis at the Super Bowl!)
Reality confirms this economist’s suspicions. Recently (after I had already written up this opportunity cost article), news broke that Swift sold her Dassault Falcon 900 jet on January 30, 2024, which leaves her with one private jet: the Dassault Falcon 7X.
What if Taylor decides to charter a private jet to get to the Super Bowl? How can understanding opportunity cost help her determine which private jet she should charter?
Looking to delve a bit further into the concept and calculations of opportunity cost with your students, while making it pertinent to something many of your Gen Z students are likely following in real life given people’s interest in Taylor Swift, Travis Kelce, the Eras Tour, and the Super Bowl? Say less! Below I map out a plausible real-world example that Swift (and her team) may have encountered this week.
News recently broke that Swift’s lawyers are not too pleased with someone who has been tracking her two private jets and publishing the flight records, as they say it poses a security risk for Swift. Further, there’s been buzz on the internet wondering if Taylor would be able to get a parking spot for her jet, as all the parking spaces at the FBOs (Fixed-base Operators—think airport for private jets) in or near Las Vegas are booked up due to the upcoming Super Bowl.
Therefore, there’s a good chance Taylor will opt to charter a private jet instead of taking her own jet to Vegas so that no one knows the jet’s N-number and she doesn’t have to worry about parking for the jet. Let’s also say that she wants a change of pace and to experience something new, so instead of chartering a Falcon 7X like the one she owns, she narrows down her options to the Gulfstream 800 and the Bombardier 8000.
Each of these jets can fly about 8,000 nautical miles (i.e. about 9,206 miles), meaning they can each easily fly non-stop from Tokyo to Las Vegas (distance of 5,530 miles). Each of these jets has a service ceiling of 51,000 ft. Because the Gulfstream 800 and the Bombardier 8000 are able to fly higher than commercial airliners (which fly around 38,000 to 40,000 ft), Taylor will be able to get better tailwind as she’s headed west to east (Tokyo to Las Vegas).
The Gulfstream 800 can fly at Mach 0.85 (about 652 mph). (For reference, the speed of sound is Mach 1, which is equal to 767.269 mph.) If she has an average 80 mph tailwind going west to east, then she’ll be flying at about 732 mph which means it would take Taylor approximately 7.5 hours to fly from Tokyo to Las Vegas in the Gulfstream 800 (5,530 miles / 732 mph = 7.55 hours).
The Bombardier 8000 can fly at Mach 0.94 (i.e. about 721 mph). With an average 80 mph tailwind, she’ll be cruising at about 801 mph, which means it would take Taylor approximately 7 hours to fly from Tokyo to Las Vegas in the Bombardier 8000 (5,530 miles / 801 mph = 6.90 hours).
It will likely cost Taylor around $16,500 per hour to rent a Gulfstream 800 jet, while the Bombardier 8000 jet would cost about $20,000 per hour. The Bombardier 8000 can get her to Las Vegas half an hour sooner than the Gulfstream 800, but it costs about $3,500/hour more to rent.
For the sake of this example, let’s say when Taylor is performing at a concert or recording in a music studio, she values her time per hour to be in the millions of dollars, but when she’s not performing in concert or recording at the studio let’s say that she values her time to be about $25,000 per hour. Should Taylor charter the Bombardier 8000 or the Gulfstream 800?
Utilizing the concept of opportunity cost, Taylor should opt for renting the Gulfstream 800 if she values her time traveling at $25,000 per hour. Why?
Remember, the opportunity cost of making a particular choice is the highest valued alternative that that individual sacrificed in order to select their top choice. Opportunity costs are subjective, meaning that it will depend on the value that each individual places on various alternative options.
Further, individuals place different values on their time, which means some individuals will rationally choose to select an option that costs more and will get them to their destination faster (such as flying) while another individual who has a more constrained budget and whose time isn’t worth as much will rationally choose a different option that is more budget-friendly but more time consuming (such as driving). When considering opportunity cost, you need to make sure you’re factoring in not just the monetary cost of selecting an option, but also taking into account (adding in) the implicit cost of the time spent if that option is selected.
Chartering the Bombardier 8000 would cost Taylor around $140,000 ($20,000 per hour * 7 hours = $140,000), while chartering the Gulfstream 800 would cost her around $123,750 ($16,500 per hour * 7.5 hours = $123,750), which means that the Bombardier 8000 will get her there half an hour sooner but will cost her about $16,250 more than if she were to charter the Gulfstream 800.
If she values her time at $25,000 per hour when she isn’t performing or recording music, then half an hour of her time is worth $12,500, which would make the Gulfstream 800 the best choice for Swift because $12,500 < $16,250.
Of course, these values for her time are hypothetical for this example, and in reality it can easily be argued that this billionaire’s time is worth more than the figure(s) used here. For example, if Swift valued her time when she isn’t performing or recording music to be $40,000 per hour, then the opportunity cost of her time is higher and thus the Bombardier 8000 would then be the preferred choice, since $20,000 > $16,250.
The post The Economics of Taylor Swift’s Trip to Super Bowl LVIII was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.