Economics of Christmas
The economics of Christmas are significant because Christmas is typically a high-volume selling season for goods suppliers around the world. Sales increase dramatically as people purchase gifts, decorations, and supplies to celebrate. In the U.S., the "Christmas shopping season" starts as early as October.[1][2] In Canada, merchants begin advertising campaigns just before Halloween (31 October), and step up their marketing following Remembrance Day on 11 November. In the UK and Ireland, the Christmas shopping season starts from mid-November, around the time when high street Christmas lights are turned on.[3][4] In the United States, it has been calculated that about one fifth of retail sales[5] to one quarter of all personal spending takes place during the Christmas/holiday shopping season.[6] Figures from the U.S. Census Bureau reveal that expenditure in department stores nationwide rose from $20.8 billion in November 2004 to $31.9 billion in December 2004, an increase of 54 percent. In other sectors, the pre-Christmas increase in spending was even greater, due to a November through December buying surge of 100% in bookstores and 170% in jewelry stores. In the same year employment in American retail stores rose from 1.6 million to 1.8 million in the two months leading up to Christmas.[7] This means that while consumers might spend more during this season, they also are given increased employment opportunities as sales rise to meet the increased demand.
"Christmas shopping" redirects here. For the album by Buck Owens, see Christmas Shopping (album).
Industries completely dependent on Christmas include Christmas cards, of which 1.9 billion are sent in the United States each year, and live Christmas trees, of which 20.8 million were cut in the U.S. in 2002.[8] In most Western nations, Christmas Day is the least active day of the year for business and commerce; almost all retail, commercial and institutional businesses are closed, and almost all industries cease activity (more than any other day of the year), whether laws require such or not. In England and Wales, the Christmas Day (Trading) Act 2004 prevents all large shops from trading on Christmas Day. Film studios release many high-budget movies during the holiday season, including Christmas films, fantasy movies or high-tone dramas with high production values to hopes of maximizing the chance of nominations for the Academy Awards.
One economist's analysis calculates that, despite increased overall spending, Christmas is a deadweight loss under orthodox microeconomic theory, because of the effect of gift-giving. This loss is calculated as the difference between what the gift giver spent on the item and what the gift receiver would have paid for the item. It is estimated that in 2001, Christmas resulted in a $4 billion deadweight loss in the U.S. alone.[9][10] Because of complicating factors, this analysis is sometimes used to discuss possible flaws in current microeconomic theory. Other deadweight losses include the effects of Christmas on the environment and the fact that material gifts are often perceived as white elephants, imposing cost for upkeep and storage and contributing to clutter.[11]
Commercialism Christmas[edit]
A free market is one where buyers are willing to buy a good from a seller at that set price. This is due to supply and demand. Christmas stimulates the economy from all facets. The supply and demand of both goods and services increase around Christmas. This is due to the overconsumption and commercialization of Christmas, oftentimes causing demand to exceed supply. Retail has utilized Christmas as generate additional sales. Consumers feel the need to assimilate to the norms of the holiday, which can result in debt. Interest rates benefit the credit card industry. Outside of the retail market sales increase in other sectors of the economy such as grocery and travel. Travel during the holidays increases by Retail sales are dependent on the supply chain of shipping and distribution, increasing revenue there as well. All of these additional products equate to additional jobs, further stimulating the economy. The demand of Christmas creates jobs that otherwise would not exist. The economic impact of commercialism Christmas is significant. Advertising for Christmas promotes shopping and emphasizes the significance of the social significance gift giving plays. The magnitude of advertising on consumers to purchase has changed the narrative for Christmas. Gratification is achieved through buying presents, traveling to be with family, and over consumption, all stimulating the economy.
Criticism[edit]
Unwanted gifts[edit]
Economist Joel Waldfogel noted that because of the mismatch between what the giftee values the gift and the value paid for by the giver, the gifts lose between 10% and one-third of their value; he calls it the "deadweight loss of Christmas".[34] This leads to gifts often being returned, sold, or re-gifted. In a 2016 European online survey, 15% of respondents were unhappy about their gifts and 10% could not remember what they had received. Twenty-five percent of respondents said they had re-gifted their presents to someone else, 14% sold the items, 10% tried to return them to the store, and 5% returned the gift to the giver.[35] Seniors were more likely to send their unwanted presents to charity, while those aged 25 to 34 "simply threw them away".[35] Gifts that are least likely to be appreciated rely on personal tastes, and include items like perfumes and cosmetics, ornaments, and clothing.[35]