We all spend quite a bit during the Christmas season, and the way we buy, give, receive and celebrate the season can tell us all a little bit about how money works. Here’s a few key Christmas economic insights.
We all spend quite a bit during the Christmas season, and the way we buy, give, receive and celebrate the season can tell us all a little bit about how money works. Here’s a few key Christmas economic insights.
🎅🏽 It costs a lot to be Santa Claus
Of course, all young children know that Santa Claus makes and delivers presents on Christmas Eve, but do you know how much his Christmas operation costs? The tech entrepreneur Kynan Eng attempted to answer that question on the Quora.com site back in 2016, and came up with a figure of $24.3 billion (£18 bn) to make the toys, and $683 million (£705m) to deliver them by ocean and road freight. Unfortunately, even Eng couldn’t figure a way of getting everything to every child on Christmas Eve; he believed Santa could do it in five days if every commercial and military plane were commandeered for the job!
🥱 Economists might prefer a boring Christmas
Have you ever been given a gift you really didn’t want? Do you think it would have been better if the gift-giver had simply handed you the cash? You’re not alone. In 2009 the American economist Joel Waldfogel published his book Scroogenomics, in which he argued that unwanted gifts are actually a massive waste of money, because the present-giver often misjudges what the recipient really wants. According to Waldfogel, people actually value things given as gifts about 20 percent less than the things they buy for themselves. That leads to around £15bn of waste each year!
🗒️ Christmas lists can teach us a lot about supply and demand
In economics, people talk about a product’s supply (the amount being made and offered to buyers) and its demand (the amount people want to buy). If demand goes up and supply stays the same, then the price usually rises, or shops run out.
At Christmas, items at the top of a lot of Christmas lists, such as PS5 consoles, are hard to get hold of, because the demand for them is so high. Less popular choices, lower down Christmas lists, such as the Xbox Series S, are easier to get, because demand is lower.
🎄Here’s why Christmas trees aren’t priced by the foot
Christmas trees don’t inch up steadily in price; instead bigger trees really jump up in price, even if they’re only a little bit taller than lower priced ones. Why? Well, it’s because older trees grow more slowly than younger ones, so, for farmers, it costs more to leave a slowly growing, taller tree in the ground, than it does to cut it down and plant a faster growing sapling in its place.
🔐 And here’s why Christmas sometimes means closed shops
Lots of companies rely on Christmas sales to see them through the rest of the year. So why would some countries insist on shops closing on Christmas Day? In 2004, the Christmas Day (Trading) act was passed by the UK parliament to prevent stores over a certain size from opening on 25 December. The law was supported by religious organisations who wanted to keep the day special, as well as many workers, who didn’t want to go to work on Christmas Day.
Check out other Christmas tips from Rooster Money, including our how-to guide to gifting a Rooster Card this Christmas; and step-by-step tips on gifting money effectively at Christmas.