An Economist’s Top Ten List For Christmas

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. Land, Labor, and Capital

• Using the North Pole Canadian postal code HOH OHO, children send their toy lists to Santa.
• Then, at the North Pole, Santa uses the land (North Pole), labor (elves), and capital (the work shop’s tools and inventory) to make more than 100 million toys.

9. Behavioral Economics

• Observing social norms, we bring presents to our holiday dinner hosts.
• However, we also know it is inappropriate to offer money.

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 $875 last year, they project $902 for 2024.

7. Tradeoffs

• If we watch Home Alone for 1 hour 43 minutes, then we cannot cook at the same time.
• Choosing is refusing.

6. Consumer Spending

• The Christmas holidays increase the GDP’s Consumer Spending component.
• Some of us will be buying the most popular toys.

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. However, for dessert, pumpkin pie was almost everywhere.

4. Supply

• Preparing Christmas dinner, we should know the most popular dishes in America.
• Roast potatoes top the list.

3. Diminishing Marginal Utility

• The first bites are the best bites.
• After that we get less extra pleasure.

2. Cost

• If the prices are the same as Thanksgiving, then a typical Christmas dinner will cost approximately $5.81 a person.
• Consequently, it takes less than 2 hours of work for someone that earns an average U.S. wage of $35.48 (BLS) to pay for a Christmas meal for 10.

1. The Power of the Market

• We can thank our market system for providing what we will need for the holidays.
• With Minnesota #1 at 39 million turkeys in 2023, because of the market system, we have lots of Christmas birds.

Our Bottom Line: Happy Holidays!

My sources and more: Expanding today’s Christmas Top Ten, there is more about consumer spending at the National Retail Federation.