Art Carden has an amusing article up at Forbes titled “Ruining Christmas: An Economist’s Guide.” Here’s a taste:
1. You Shouldn’t Have. No, Really. You Shouldn’t Have. The classic salvo in the literature on the economics of Christmas is Joel Waldfogel’s “The Deadweight Loss of Christmas,” which provides a bit of evidence that people would be happier if you gave them cash instead of an equally-expensive present. Yes, it’s the thought that counts, but how many of us have given (or gotten) gifts that have ended up in an end-of-year Goodwill donation or a Spring yard sale?
We learned this first-hand at a family holiday party that involved a white elephant gift exchange. Everyone went home happy, but one participant (an Alabama fan) opened a box of Auburn stuff, another (an Auburn fan) opened Alabama stuff, and one of the gifts I (an Alabama fan) opened was an LSU cap. Again, everything worked out in the end, but the initial distribution was incredibly inefficient.
Read the whole thing. Carden also wrote the equally amusing “How Economics Saved Christmas.” My review of Waldfogel’s book is here.
Uriminzokkiri, the North Korean government’s official news website is threatening a real war on christmas:
“The enemy warmongers… should be aware that they should be held responsible entirely for any unexpected consequences that may be caused by their scheme,” it said.
“This issue… is not something to be ignored quietly,” it said.
Why such harsh words? Because in some years, South Korea places christmas lights within sight of its border with North Korea.
Leave aside the North’s official atheism; this doesn’t seem to be a religious issue. The lights send what is possibly a deliberate foreign policy message. Electricity is a rare thing in North Korea, especially outside of Pyongyang. The sight of bright electric lights shining from the hated South has to be bad for morale.
This year’s Black Friday was much more peaceful than last year’s. No tramplings were reported. There was a fight at a Wal-Mart in the wee hours, unfortunately. The store was temporarily closed, which led to this lovely scene:
[P]eople began “yelling and screaming,” pounding on the glass doors and trying to sneak into the store through the lawn and garden section. Store managers had to be sent outside to try to calm the crowd, workers said.
Which brings us to Black Friday’s most important economics lesson: not all costs are measured in money. Yes, the discounts to be had can be great. But you pay a price for them. The price can be waiting outside in the cold. It could be the crowds, the parking, or the long checkout lines. In rare cases like today’s Wal-Mart near-riot, safety becomes an issue.
Here’s an example of what I mean. Suppose the people who camp out all night end up saving $40 on their purchases. If they spend eight hours suffering in the cold, that’s a savings of only $5 per hour. Less than minimum wage. Some people don’t place much value on their time, it seems.
Or, for some people, Black Friday’s pomp, circumstance, and sales are a cultural experience. They’re worth all the trouble. For other people, they’re not. Wherever you stand, non-price costs should be factored into your shopping habits. Otherwise you just might be getting ripped off.