Toronto held its annual Santa Claus Parade on Sunday. (The city’s most famous heavy-set, ruddy-cheeked resident, controversial Mayor Rob Ford, stayed home to let Kris Kringle have the spotlight.) For people in the United States, Nov. 17 seems early for a Christmas parade, but Canadians’ holiday season arguably begins earlier than ours: Canadian Thanksgiving is held in October. Would the U.S. economy get a boost if we held Thanksgiving a little earlier and extended the holiday season?
No. Americans’ spending on Christmas gifts varies hugely by year, but the variation has far more to do with the state of the overall economy than the number of days between Thanksgiving and Christmas. For example, planned spending on gifts closely tracked the rise in GDP and increased between 1990 and 1991, even though those two years had the earliest and latest possible Thanksgivings, respectively. (Data on actual, rather than planned, spending is harder to come by.) Retailers worried about the late Thanksgiving this year can take confidence from 2002, which saw some of the biggest gift spending on record despite turkey day’s falling on Nov. 28.
There’s no indication that Canadians spend more on gifts because they hold their holiday parades early in the year. Despite a slightly higher per capita GDP, Canadians spend less on Christmas than people in the United States do. In 2011, for example, the average Canadian planned to spend $582.70 on Christmas gifts, compared with $646 for the average American. (The Canadian dollar was approximately even with the U.S. dollar that year.) The holiday shopping habits of the two countries are rapidly converging, though. In the last couple of years, Canadian malls, especially those near the border, have begun holding Black Friday sales and opening early on the day after U.S. Thanksgiving.
The Economist recently plotted national Christmas gift spending against GDP per capita. The results suggest that holiday generosity roughly correlates to wealth, with a few notable exceptions. The Netherlands is one of Europe’s wealthiest nations, but the Dutch among the stingiest gift-givers. (The magazine attributed this to a centuries-old tradition of austerity.) Luxembourgers, by contrast, spend lavishly on gifts, even taking into account their startlingly high GDP. Americans are relatively generous with gifts, while Canadians are more or less in the middle of the pack.
There are a number of scrooges among American economists, experts who argue that Christmas actually has a negative impact on U.S. finances. It’s indisputable that spending surges during the holidays—retailers pull in 25 percent of revenue and 60 percent of profits around Christmas time. Many, perhaps most, department stores lose money for 10 months per year, relying on the holidays to make it all back plus a little extra. Skeptics argue that Americans might spend the same amount of money without the holiday but spread it more evenly across the year. (Christmas club accounts, the formerly popular service that banks offered to keep people from spending until the holidays, support this argument.) Or people might spend their money in more productive ways, like investing in better Internet service, if they didn’t have to buy gifts. Doubters also point to the now-landmark study done by economist Joel Waldfogel in 1993. He found that gift recipients valued their booty at 10 percent less than the value the givers actually paid for the items. In other words, Christmas giving represents a net destruction of around $4 billion dollars annually.
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