19
Dec
07

The Economics of Christmas

Let me pose to you a question:

Say you have two pairs of pants. The first pair of pants you found on a discount rack, and they’re the latest fashion. Because they’re so trendy, you don’t want to wear them too much, so you wear them about once a month or less, and after about a year, they’re out of style, and you banish them to the part of your closet where you keep old Christmas sweaters given to you by your crazy grandma. The second pair are a bit more expensive, in fact, they’re a LOT more expensive. They’re a really nice pair of jeans, but they’re functional, and they become your “all the time” jeans, and you wear them about once a week, and they last you two years. Let’s say the first pair cost you $20, and the second pair cost $150. What’s the smarter purchase? Well, even though the second pair is 750% more expensive than the first pair, you’d probably be better off with the expensive ones. If you calculate it out, figuring how much each wearing will cost you, you’re looking at $1.66 each time for the trendy pair, and $1.44 for the durable, wearable pair.

So what am I getting at? Nothing, really. I’ve just been thinking a lot lately about the real value of things. Does that mean I’m trying to convince you all to shop at Dolce & Gabbana instead of Old Navy? Of course not. Anyone who knows me knows that the day I spend more than $40 on a piece of clothing there’ll be snowball fights in Hell– that’s not it. The thing I’ve been thinking about lately is this: we all know Christmas is too commercialized, and so much is focused on presents and material goods, and we all will say that’s not the real meaning of Christmas–but if we’re honest with ourselves, unless we own solar panels and clothing made out of wheat, we’re not going to stop Christmas shopping all together. So if we are going to buy gifts, how can we maximize value and minimize waste in a nation that is notorious for being the most wasteful in the world?

Consider this example: let’s say when you were a baby, on Christmas your distant uncle, let’s call him Melchior, gives you a gift of… oh, frankincense, which in case you don’t know, is an aromatic tree resin used to make incense. You, the helpless infant, have no use for said tree resin, and it ends up in a shoe box under your bed for six years, and you get never get any use out of it. So even if Uncle Melchior spent $300 on the frankincense, because you didn’t get any use out of it, he might as well have burnt the cash.

Now, let’s say instead of the frankincense, Uncle Melchior goes to Babys ‘R’ Us, and gets mom and (step)dad a $300 gift card, which they use on diapers, baby clothes, and things you actually need. Now, Uncle Melchy has still spent the same amount, but wouldn’t you say he’s used his money more efficiently? I would.

So does that mean I think we should all just exchange gift cards on Christmas? Honestly, I don’t know. Many Americans seem to think so, because sales of gift cards have gone through the roof, up to $80 billion in 2006. However, 8 of those 80 billion, economists assert, will never be redeemed. So there’s waste there, too. How do you get rid of the waste? What’s the answer? A stocking full of cash? A bunch of people sitting on Christmas morning, sipping hot cocoa and saying, “Merry Christmas, here’s how many dollars I would have spent on you had I bought you something that maybe you wouldn’t have liked”? Not a very meaningful holiday celebration, if you ask me.

So which is the better alternative? Honestly…? I dunno. I guess telling people what you do want for Christmas can minimize the potential for waste, but for a person like me, who loves to go out of their way to find that perfect gift for someone, there’s not much fun in turning Christmas shopping into something closer to grocery shopping. Maybe this is a symptom of an over-commercialized culture. Maybe it’s the result of a culture that produces families that are too busy to sit down and talk to each other, and as a result don’t really know each other anymore. Maybe it’s just a holiday tradition that we partake in, and it shouldn’t be that big a deal. The only thing I know is that I don’t know the answer.

So… what do you think?

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