Published in Insights, The New Zealand Initiative’s newsletter, 12 December 2014
In a series of articles earlier this year, we introduced Insights readers to some basic ideas from the wonderful world of economics. Today, we are releasing the compilation of pieces in a short pamphlet, The ABC of Economic Literacy.
As we showed in our ABC’s, economics is a powerful toolkit that can help us understand our world. Economic laws and principles even apply where most of us are scarcely aware of them. In fact, that is where economic thinking is most fun.
I was reminded of the quirkiness of the economic point of view when reading a new working paper, Christmas Economics – A Sleigh Ride.
Written by Laura Birg and Anna Goeddeke, it is serious review of the economic literature on Christmas. Their humorous approach nevertheless shines through in the keywords submitted for indexation of the paper: Christmas, Santa Claus, Rudolph the Red-Nosed Reindeer, elves, presents, welfare. This must be the first economics paper ever to mention Rudolph.
Christmas Economics sheds some light on a range of different phenomena, from travelling patterns and flight fares during the festive season to weight gain and alcohol consumption over the Christmas holidays.
Some of the correlations are not hard to guess. Anyone who has ever flown to visit family for Christmas would know that ticket prices can be quite a bit higher than at non-peak times. Similarly, an increase in alcohol consumption in December is something most of us would have expected.
As for the Christmas-related weight gain, it is not quite as bad as you may have feared. A study suggests that there is only a moderate (but significant) increase in weight during the holiday period (to be precise: 0.37 kg ± 1.52 kg).
Other aspects also caught economists’ attention. Suicides are apparently less frequent during the Christmas holidays, but unfortunately other causes of death are not. As it turns out, the number of deaths spikes around Christmas and New Year – with no apparent explanation. It may be small consolation that there is a countervailing effect as well: The number of children conceived also peaks during Christmas.
Finally, some advice for investors. Stock markets used to be more buoyant just before Christmas, but that effect has been in decline in most capital markets – except for New Zealand. Since our own stock market seems to be less sophisticated, one study found, there is still a chance to gain some decent pre-Christmas investment gains.
With this in mind, have an economically efficient Christmas and a prosperous New Year!