Dec 28, 2008

Christmas spirit and the number of shopping days

It's often reported that a longer shopping season (the number of days between Thanksgiving and Christmas) translates into higher retailer receipts. But does this make sense? Just because Thanksgiving falls a few days earlier doesn't mean your gift list increases. With fewer days, one might reduce their trips to the mall but make more purchases on each trip, leaving the total amount spent unchanged. But a longer shopping season does increase the opportunity for impulse purchases.

This paper from 2005 found that a longer shopping season increased per capita retail sales by $6.50 per additional day over the relevant range, and the effect is most noticeable in electronics, apparel, food, and general merchandise. The author studied the November-December shopping season and deflated results based on October sales to adjust for the strength of the overall economy at that time to arrive at excess sales. Interestingly, increased sales in the holiday season don't translate into reduced spending in January, and since the total amount of household wealth is unchanged, the deficit must come out of savings.

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