Economics of Christmas

Christmas is typically the largest annual economic stimulus for many nations. Sales increase dramatically in almost all retail areas and shops introduce new products as people purchase gifts, decorations, and supplies. In the U.S., the "Christmas shopping season" generally begins on Black Friday, the day after Thanksgiving, though many American stores begin selling Christmas items in October and early November.
In most areas, Christmas Day is the least active day of the year for business and commerce; almost all retail, commercial and institutional businesses are closed, and almost all industries cease activity (more than any other day of the year). In England and Wales, the Christmas Day (Trading) Act 2004 prevents all large shops from trading on Christmas Day. Scotland is currently planning similar legislation. Film studios release many high-budget movies in the holiday season, including Christmas films, fantasy movies or high-tone dramas with high production values.
An economists analysis calculates that Christmas is a deadweight loss under orthodox microeconomic theory, due to the surge in gift-giving. This loss is calculated as the difference between what the gift giver spent on the item and what the gift receiver would have paid for the item. It is estimated that in 2001 Christmas resulted in a $4 billion deadweight loss in the U.S. alone. Because of complicating factors, this analysis is sometimes used to discuss possible flaws in current microeconomic theory. Other deadweight losses include the effects of Christmas on the environment and the fact that material gifts are often perceived as white elephants, imposing cost for upkeep and storage and contributing to clutter.