The "Holiday Season"
By Lucy Campbell | December 1, 2022
The period of time from Thanksgiving to Christmas ranges from 26-32 days depending on when the third Thursday of November falls. In his research at the University of Missouri, economist Emek Basker found that there is a correlation between the length of that period and average holiday retail sales. By comparing how sales in this holiday season increase in comparison to the rest of the respective year over 33 years, Basker shows that sales consistently increase proportionately to the length of the period. This trend occurs in sectors that are typically purchased as gifts such as apparel, electronics, general merchandise, and jewelry. The data shows that with every additional shopping day between Thanksgiving and Christmas, “total per-capita retail sales over the 2-month period November–December increase by approximately $6.50 (in 2000–2002 dollars)”.
Basker speculates this statistically and economically significant increase could in part be due to consumers experiencing more “habit-formation” when the holiday season is lengthier. High frequency exposure to discounts, marketing, and appeals to sentimentality can condition consumers to be more inclined to purchase more goods, leading to an overall increase in average retail sales. They also become more familiar with holiday deals and store layouts. This being said, the increased spending is primarily observed in November, while December sales remain more constant, suggesting that “consumers may be constrained by the time available for Christmas shopping.” The increase, therefore, is largely accrued in the November portion of the holiday season.
Regardless of why sales increase, the simple calculation of the length of the period between Thanksgiving and Christmas can potentially be used to predict macroeconomic trends. Even these preliminary studies can be used in an effort to assess annual demand as well as to predict changes to business cycles, which are heavily influenced by economic shocks such as holiday spending.
Edited by Rachel Kunka