User:Dazore6/Economics of Christmas

History:

- In the early 90s Joel Waldfogel an assistant professor of economics at Yale University published a paper titled "The Deadweight Loss of Christmas" which stated and went into detail on the relationship between the value of an item to someone verses the actual cost of that item. This concept led to the economic term "deadweight loss" which is what we now call the loss of economic efficiency from an under or over valued item. In 1993 John L. Solow argued Waldfogel's theory with his own paper " Is it Really the Thought that Counts?". Which gives two examples that can speak on maximum utility based on different gifts. One being that when giving a gift of money this allows others to spend on items that give them maximum utility per dollar spent and the other being that when one parties utilities depend on another's consumption of particular goods, gifts of goods can be more economically efficient than money.In 2009, Lydia Yao, who graduated from Duke University with a bachelors of science in economics, provided another point of view to the topic of gift giving, by using a model to help measure the sentimental value of a non-monetary gift versus one that cost money.

Commercialism Christmas:

A free market is one where buyers are willing to buy a good from a seller at that set price. This is due to supply and demand. Christmas stimulates the economy from all facets. The supply and demand of both goods and services increase around Christmas. This is due to the overconsumption and commercialization of Christmas, often times causing demand to exceed supply. Retail has utilized Christmas as generate additional sales. Consumers feel the need to assimilate to the norms of the holiday, which can result in debt. Interest rates benefit the credit card industry. Outside of the retail market sales increase in other sectors of the economy such as grocery and travel. Travel during the holidays increases by   Retail sales are dependent on the supply chain of shipping and distribution, increasing revenue there as well. All of these additional products equate to additional jobs, further stimulating the economy. The demand of Christmas creates jobs that otherwise would not exist. The economic impact of commercialism Christmas is significant. Advertising for Christmas promotes shopping and emphasizes the significance of the social significance gift giving plays. The magnitude of advertising on consumers to purchase has changed the narrative for Christmas. Gratification is achieved through buying presents, traveling to be with family, and over consumption, all stimulating the economy.