Tag: holidays

Nudge, Nudge, Win, Win: The 2017 Nobel Prize in Economics

It’s awards season! Before you get too excited about couture dresses, the red carpet and celebrities’ speeches being cut off by orchestral music, let me explain. The Royal Swedish Academy of Sciences recently awarded the Nobel Prize in Economic Sciences to Richard Thaler, an economist at the University of Chicago, whose work in behavioral economics has revolutionized the way economists analyze the world. To understand Thaler’s contribution to the field, we first need to have a brief lesson in economic theory (I promise that it won’t be too boring). Classical economics is based on the idea that people act...

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The Great American Eclipse of 2017: A Boom for Business

The Great American Eclipse of 2017 is over, with the next significant viewing opportunity in the U.S. expected in 2024. With such a highly-anticipated event that was visible to all of North America, there have been a multitude of articles discussing the associated economic booms and productivity losses. For towns in 14 states that were in the path of totality, or the 70-mile wide band in which the sun was completely obscured by the moon, an influx of tourists presented an opportunity for economic gains, albeit some logistical headaches. The demand for eclipse-watching spots in the path of totality...

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The Economic Boom of Fireworks

As a Baltimore resident, I find it especially fitting to celebrate the Fourth of July in the city where the Star Spangled Banner was written. Each year, Fourth of July festivities here in Baltimore and across the nation are marked by a variety of quintessentially American activities: parades, patriotic concerts, barbeques, and (most notably) firework displays. While I enjoy the beauty of bursting colors as they shoot across the sky, fireworks are also a boon to the economy. For example, consumers spent approximately $755 million on fireworks in 2015, and fifteen minutes’ worth of backyard fireworks can cost between...

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The Economist’s Night Before Christmas

‘Twas the night before Christmas, when all through the economy Not a creature was stirring, save for the GDP. The stock trades were hung by the chimney with care, In hopes that low interest rates soon would stay there. Forecasters were nestled all snug in their beds, While visions of employment growth danced in their heads. And Yellen in her ‘kerchief, and I in my cap, Had just settled our brains for a long winter’s nap. When out on the market arose such a clatter, I sprang from the bed to see what was the matter. Away to the...

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How the Economist Stole Christmas

Now that Thanksgiving has passed, the holiday season is in full force. In previous blog posts, I’ve considered the economic impact of various holiday events and phenomena. This year, in the spirit of trying something new, I’ve decided to flip my approach and think about the economics that exist in a holiday story. Take, for example, Charles Dickens’s classic A Christmas Carol. A Christmas Carol The novella, first published in 1843, recounts the tale of Ebenezer Scrooge, a miserly accountant. On Christmas Eve, as Scrooge is going to bed, he is visited by the ghost of Marley (Scrooge’s former...

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Martin Luther King Jr.’s Legacy and Economics

The merry revelry of December may be over, but the new year brings new holidays: Martin Luther King, Jr. Day. Proposed in 1968 and officially designated a federal holiday in 1983, MLK Jr. Day was codified as a state holiday in all fifty states in 2000. The third Monday of January (January 19 this year) is designated to honor King and his legacy of challenging racism and the status quo power structure through peaceful protest and civil disobedience. Martin Luther King Jr.’s Advocacy for Economic Causes While King is best known for his civil rights work, he has shaped...

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The Economics of The Nutcracker

For me, as a ballet dancer, one thing above all signals that the holidays are here: not Black Friday, not the return of the red cups at Starbucks (but check out my previous blog about the pumpkin spice effect), not decorations or window displays, or even ugly sweaters, but rather the arrival of Nutcracker season. But what business does The Nutcracker have on an economics blog? After all,  The Nutcracker is a story ballet based on E.T.A. Hoffman’s story The Nutcracker and the Mouse King and set to Tchaikovsky’s score. The ballet is a holiday tradition performed by ballet...

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The Pumpkin Spice Effect

As the days get shorter and the temperature cools, as flannel, scarves, and boots reenter wardrobes and flip flops are buried in the bottoms of closets, it is abundantly clear: fall is upon us. And this change can mean only one thing: the much-anticipated return of pumpkin spice season. What began when Starbucks introduced its pumpkin spice latte in 2003 has blossomed into $308 million of pumpkin-themed sales annually. And what better way to analyze this phenomenon than with the economist’s toolbox? The central theme of economics is scarcity: limited resources despite unlimited desires. And pumpkin spice lattes are...

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Valentine’s Day by the Numbers

Every February, restaurant reservations at romantic spots become very scarce, heart-shaped gift boxes of chocolates sell like hotcakes, and the price of a dozen roses seemingly rises along with the stress level of any one who is in a relationship and is looking for that perfect Valentine’s Day gift.  According to the National Federation of Retailers, an American will spend $133.91 on average on Valentine’s Day gifts, compared to $130.97 in 2013. However, only 54% of those surveyed will celebrate the holiday—down from 60% in 2013. With the advent of the internet and smart phones, Valentine’s Day gift giving...

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Why Are Retailers Open on Thanksgiving?

As we are carving into our turkey (or tofurkey if you don’t eat meat) and enjoying the company of our families and loved ones (dysfunctional as they all may be), many retail employees will have already have worked a full day. Many stores will have been open since 6:00 a.m. to offer great, budget-pleasing deals to hardy shoppers.  This raises the question: why? There are two challenges that face retailers. First, how do you squeeze out more shopping time between the Friday after thanksgiving and Christmas morning? Second, how do you top last year’s deals?  According to many sources, about 20 percent of the retail industry’s sales occur between Black Friday and Christmas.  Retail sales are expected to rise by about 4 percent. The holiday season can make or break a retailer, so this is a very important period. A little history: the Friday after thanksgiving was named “Black Friday” by Philadelphia merchants in the early ‘60s.  It was considered a negative as it was named to describe the downtown crowds and traffic on both Friday and Saturday.  Now, it’s considered to be the official start of the holiday shopping season.  As internet shopping became more commonplace, and online retailers inevitably participated in this bacchanalia of shopping, a new term was coined in 2005: “Cyber Monday.” The term refers to the Monday following Thanksgiving. Cyber retail sales have more...

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