An Economist’s Top Ten List For the Holidays

Through a Top Ten list, we can see how economics has the perfect lens for understanding our holiday behavior.

A Holiday Top Ten List

10. Land, Labor, and Capital

• 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.
• Then, his deliveries depend on capital that can travel somewhere between 650 and 1,800 miles a second.

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) estimates that we spent $902 last year, they project $890 for 2025.

7. Tradeoffs

• If we watch Home Alone for 1 hour 43 minutes, then we cannot watch Elf (my #2 favorite) at the same time.
• Choosing is refusing.

6. Consumer Spending

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

5. Demand

• Most of us will enjoy peanut butter balls and blossoms this year.
• But still, the Christmas cookies we demand depends on where we live.

4. Supply

• Preparing a holiday dinner, we should know the most popular dishes in America.
• Roasted potatoes top the list. Then, scalloped potatoes, roast beef, and red velvet cake come next.

3. Diminishing Marginal Utility

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

2. Cost

• We shift many hours toward parties, gift buying, cooking, and a slew of activities.
• As a result, using sacrifice as our definition of cost, Christmas is expensive at home and at work.

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 an estimated 32 million turkeys in 2024, because of the market system, we have lots of Christmas birds.

Our Bottom Line: Happy Holidays!

My sources and more: Expanding today’s Holiday Top Ten, we found more about consumer spending at the National Retail Federation  and about what we eat at Good Housekeeping. And, if you enjoy gobbling (sorry) a slew of turkey facts, do take a look at this Minnesota website.

Please note that this year’s Top Ten is an updated and revised 2024 Holiday post.