The Economics of Christmas
“Each UK citizen will spend an average of £54,000 on Christmas during their lifetime”
Over the years, the meaning of Christmas has shifted as England moves away from the religion of Christianity towards the religion of retail. Christmas has quickly become the time of year that can make or break both online and offline stores as consumers gear up for spending splurz`ges. But what are the true economics of Christmas and who wins and loses? Each UK citizen will spend an average of £54,000 on Christmas during their lifetime, but many are quick to bemoan the commercialisation of Christmas. In 1993, economist Joel Waldfogel published The Deadweight Loss of Christmas in the American Economic Review, stating, “gift-giving is a potential source of deadweight loss”, i.e. a person receiving a gift generally places a lower value on the item than the giver paid for it. Writing in The Guardian in 2012, environmental and political activist George Monbiot urged people to stop splurging on “pointless, planet-trashing products”. “Bake them a cake, write them a poem, give them a kiss, tell them a joke, but for God’s sake stop trashing the planet to tell someone you care. All it shows is that you don’t,” he implored.
“On Black Friday 2017, US online revenues amounted to 2.36 billion US dollars, up from 1.97 billion US dollars in the previous year,”
There has also been some disruption from the rise of online retailers, such as Amazon and AO World, in recent years. Earlier this year, The Guardian reported that Christmas 2017 had been tough for high street retailers, whereas there had been a 51% increase in internet purchases in the week before Christmas, with online retailers’ sales up 19% in December. AO World posted UK revenue growth of 11.4% in the “the golden quarter”, the final three months of the year that encompasses the Christmas holiday period. Amazon captured a whopping 89% of online spending in the five-week period from Thanksgiving 2017, according to data specialist Earnest Research. This year, Americans spent US$7.9 billion online on “Cyber Monday”, the Monday following Thanksgiving and Black Friday, up 19% on 2017, making it the most successful online shopping day in history. It was Amazon’s biggest ever shopping day, with 18 million toys and 13 million fashion items ordered worldwide on Black Friday and Cyber Monday and Amazon’s own Echo Dot its best-selling product.
“Every year Mariah Carey earns an estimated £376,000 in royalties from her holiday hit All I Want for Christmas”
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