The Economics of Christmas
The economics of Christmas involve the act of gift giving, the impact of shopping on retailers and the economy, and the amount of money the consumers spend during the holidays. During the Christmas season, many economic elements come into play that the consumers and producers must think about when trying to benefit from the frenzy of activity. Gift giving in general has a decreased value to the receiver than the one who originally bought the gift. Buying a gift is often a worse economic choice for the consumer than just giving a monetary gift that has better value to the recipient. Family relation can change that value to the receiver. Another aspect of the shopping season is the retailers promoting increased spending both before and after the holiday. There is increased economic activity during this time that benefit the retailers. Consumers and …show more content…
The value of a gift is mostly lower than what the gift giver originally spent on it (Loewenstein, Sunstein, 2012). Gift-giving is an ineffienct system and an economist, Joel Waldfogel, conducted several studies that showed how gifts lose value from the original purchase price. In Waldfogel’s article (1993), he surveyed two groups of college students to investigate how much value was lost. The ratio of average value to average price paid was 71.5% and 90.8% (Waldfogel 1993). The survey for the first group of students lumped all gifts received together no matter relationship and the second survey separated out the gifts based on the relationship to the gift giver. The value lost was less when relationship was a factor taken into consideration. Often the gifts that keep the most of their value and with the least deadweight loss are those from close family and friends (“Is Santa a Deadweight Loss?” 2001). However, there is an almost foolproof way to keep the value of a
The economics of Christmas involve the act of gift giving, the impact of shopping on retailers and the economy, and the amount of money the consumers spend during the holidays. During the Christmas season, many economic elements come into play that the consumers and producers must think about when trying to benefit from the frenzy of activity. Gift giving in general has a decreased value to the receiver than the one who originally bought the gift. Buying a gift is often a worse economic choice for the consumer than just giving a monetary gift that has better value to the recipient. Family relation can change that value to the receiver. Another aspect of the shopping season is the retailers promoting increased spending both before and after the holiday. There is increased economic activity during this time that benefit the retailers. Consumers and …show more content…
The value of a gift is mostly lower than what the gift giver originally spent on it (Loewenstein, Sunstein, 2012). Gift-giving is an ineffienct system and an economist, Joel Waldfogel, conducted several studies that showed how gifts lose value from the original purchase price. In Waldfogel’s article (1993), he surveyed two groups of college students to investigate how much value was lost. The ratio of average value to average price paid was 71.5% and 90.8% (Waldfogel 1993). The survey for the first group of students lumped all gifts received together no matter relationship and the second survey separated out the gifts based on the relationship to the gift giver. The value lost was less when relationship was a factor taken into consideration. Often the gifts that keep the most of their value and with the least deadweight loss are those from close family and friends (“Is Santa a Deadweight Loss?” 2001). However, there is an almost foolproof way to keep the value of a