Through a Christmas Top Ten list, we can see how economics has the perfect lens for understanding our holiday behavior.
Christmas Top Ten List
10. Social Norms
- Violating a social norm, a grandmother in Wales charges for her holiday meals.
- Each of her adult sons pays £15 while at £10, the daughters pay less.
9. Deadweight Loss
- Remembering Deadweight Loss, the GDP should rise by less during the 4th quarter.
- Because any $50 present that we dislike is not worth its purchase price, we should account for its deadweight loss and add less to the GDP.
8. Reference Point:
- Providing a reference point, last year’s totals can signal this year’s holiday spending.
- While the NRF (National Retail Federation) tells us that we spent $833 last year, they project $875 for 2023.
7. Tradeoffs
- If we watch Home Alone for 1 hour 43 minutes, then we cannot cook or wrap presents at the same time.
- Choosing is refusing.
6. GDP
- The Christmas holidays increase the GDP’s Consumer Spending component.
- However, with the extra shopping days that FDR added in 1939, GDP can increase by more. During 1939, President Roosevelt moved Thanksgiving from the. last Thursday of the month to the second-to-last Thursday.
5. Demand
- What we demand for Christmas dinner depends on where we live.
- While Southerners prefer Black-eyed peas, in the Northeast, we like our lasagna.
4. Supply
4. Supply- Preparing Christmas dinner, we should know the most popular dishes in America.
- Roast potatoes top the list.
3. Diminishing Marginal Utility
3. Diminishing Marginal Utility- The first bites are the best bites.
- After that we get less extra pleasure.
2. Cost
- A typical Christmas dinner could cost $108.
- Consequently, it takes slightly more than 3.3 hours of work for someone that earns an average U.S. wage of $32.58 (BLS) to pay for a Christmas meal for 10.
1. The Power of the Market
- We can thank our market system for knowing what we will need for the holidays.
- With Minnesota #1 at more than 39 million turkeys, because of the market system, we have lots of Christmas birds.
Our Bottom Line: Happy Holidays!
My sources and more: Expanding today’s Top Ten update, there is more about consumer spending at the National Retail Federation. Then, Time had the story of how FDR moved Thanksgiving Day and People told about the grandmother that charges for Christmas dinners,. And finally, surveys at you.gov focused on what we want for Christmas dinner.
