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Beyond the economics of Christmas
Exchanging gifts at Christmas is, aside from any other symbolism we want to see in it, an illustration of our profound economic instincts — and there is more!
Christmas is good for the economy — many businesses rely on the Christmas trade to stay in the black (or get out of the red). In the UK, retail sales for December 2021 amounted to nearly £55 billion (€63B, $67B), close to 12% of the annual figure, and about 17B more than the average of the other 11 months — about £260 (€300, $310) for every person in the country. But aside from all those sales transactions between consumers and retailers related to the year-end festivities, the gift giving aspect is, itself, a manifestation of our economic nature that goes well beyond the activity of buying and selling goods and services.
This is also the time when left, right and centre, economist Joel Waldfogel’s 2001 paper on the deadweight loss of Christmas is wheeled out, in which he argues that the money spent on gifts is more than the value the recipients see in what they get. (I am guilty * of doing so too.) But whether we would be better off giving each other cash, or whether Mr Waldfogel is missing some important point, the phenomenon of giving each other something is ultimately an economic transaction too…
