Why We Have Fewer Eggs
December 24, 2024
The Economic Side of “Home Alone” (updated)
December 26, 2024
Through a Christmas Top Ten list, we can see how economics has the perfect lens for understanding our holiday behavior.
Christmas Top Ten List
10. Land, Labor, and Capital
- Using the North Pole Canadian postal code HOH OHO, children send their toy lists to Santa.
- Then, at the North Pole, Santa uses the land (North Pole), labor (elves), and capital (the work shop’s tools and inventory) to make more than 100 million toys.
9. Behavioral Economics
- Observing social norms, we bring presents to our holiday dinner hosts.
- However, we also know it is inappropriate to offer money.
8. Reference Point
- Providing a reference point, last year’s totals can signal this year’s holiday spending.
- While the NRF (National Retail Federation) tells us that we spent $875 last year, they project $902 for 2024.
7. Tradeoffs
- If we watch Home Alone for 1 hour 43 minutes, then we cannot cook at the same time.
- Choosing is refusing.
6. Consumer Spending
- The Christmas holidays increase the GDP’s Consumer Spending component.
- Some of us will be buying the most popular toys.
5. Demand
- What we demand for Christmas dinner depends on where we live.
- While Southerners prefer Black-eyed peas, in the Northeast, we like our lasagna. However, for dessert, pumpkin pie was almost everywhere.
4. Supply
- Preparing Christmas dinner, we should know the most popular dishes in America.
- Roast potatoes top the list.
3. Diminishing Marginal Utility
- The first bites are the best bites.
- After that we get less extra pleasure.
2. Cost
- If the prices are the same as Thanksgiving, then a typical Christmas dinner will cost approximately $5.81 a person.
- Consequently, it takes less than 2 hours of work for someone that earns an average U.S. wage of $35.48 (BLS) to pay for a Christmas meal for 10.
1. The Power of the Market
- We can thank our market system for providing what we will need for the holidays.
- With Minnesota #1 at 39 million turkeys in 2023, because of the market system, we have lots of Christmas birds.
Our Bottom Line: Happy Holidays!
My sources and more: Expanding today’s Christmas Top Ten, there is more about consumer spending at the National Retail Federation.
