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Economics of Christmas
The economics of Christmas is significant because Christmas is typically a peak selling season for retailers in many nations around the world. Sales increase dramatically as people purchase gifts, decorations, and supplies to celebrate. In the U.S., the "Christmas shopping season" starts as early as October.〔Varga, Melody. ("Black Friday ), ''About:Retail Industry''.〕 In Canada, merchants begin advertising campaigns just before Halloween (October 31), and step up their marketing following Remembrance Day on November 11. In the UK and Ireland, the Christmas shopping season starts from mid November, around the time when high street Christmas lights are turned on.〔(South Molton and Brook Street Christmas Lights ) (Tuesday November 16, 2010) ''View London.co.uk''〕〔Julia Kollewe Monday (November 29, 2010) (West End spree worth £250m marks start of Christmas shopping season ) ''The Guardian''〕 In the United States, it has been calculated that a quarter of all personal spending takes place during the Christmas/holiday shopping season. Figures from the U.S. Census Bureau reveal that expenditure in department stores nationwide rose from $20.8 billion in November 2004 to $31.9 billion in December 2004, an increase of 54 percent. In other sectors, the pre-Christmas increase in spending was even greater, there being a November–December buying surge of 100 percent in bookstores and 170 percent in jewelry stores. In the same year employment in American retail stores rose from 1.6 million to 1.8 million in the two months leading up to Christmas.〔US Census Bureau. ("Facts. The Holiday Season" ) December 19, 2005. (accessed 2009-11-30)〕 Industries completely dependent on Christmas include Christmas cards, of which 1.9 billion are sent in the United States each year, and live Christmas Trees, of which 20.8 million were cut in the U.S. in 2002.〔US Census 2005〕 In the UK in 2010, up to £8 billion was expected to be spent online at Christmas, approximately a quarter of total retail festive sales.〔
During the 2014 holiday shopping season, retail sales in the United States are forecast to increase to a total of over $616 billion, up from 2013's $602 billion. The average US holiday shopper is expected to spend over $800, of which close to 73 percent will be in gifts.〔 (Retail Holiday Shopping Statistics ) 〕
In most Western nations, Christmas Day is the least active day of the year for business and commerce; almost all retail, commercial and institutional businesses are closed, and almost all industries cease activity (more than any other day of the year), whether laws require such or not. In England and Wales, the Christmas Day (Trading) Act 2004 prevents all large shops from trading on Christmas Day. Scotland is currently planning similar legislation. Film studios release many high-budget movies during the holiday season, including Christmas films, fantasy movies or high-tone dramas with high production values to hopes of maximizing the chance of nominations for the Academy Awards.
One economist's analysis calculates that, despite increased overall spending, Christmas is a deadweight loss under orthodox microeconomic theory, because of the effect of gift-giving. This loss is calculated as the difference between what the gift giver spent on the item and what the gift receiver would have paid for the item. It is estimated that in 2001, Christmas resulted in a $4 billion deadweight loss in the U.S. alone.〔"The Deadweight Loss of Christmas", ''American Economic Review'', December 1993, 83 (5)〕〔("Is Santa a deadweight loss?" ) ''The Economist'' December 20, 2001〕 Because of complicating factors, this analysis is sometimes used to discuss possible flaws in current microeconomic theory. Other deadweight losses include the effects of Christmas on the environment and the fact that material gifts are often perceived as white elephants, imposing cost for upkeep and storage and contributing to clutter.〔Reuters. ("Christmas is Damaging the Environment, Report Says" ) December 16, 2005.〕
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