Saturday, October 29, 2005

Economics of Halloween

A fairly open question to end things for the week:

What do you think are the economic effects of Halloween? The more creative (and the less obvious) the better. What markets do you think are most affected by the holiday (positively or negatively)?

To go ahead and take away the most obvious answers, I am sure that candy makers and costume shops have a sharp increase in demand for their products. A more interesting question along those lines though: If the demand for those products is higher during Halloween, why do most grocery stores have sales on candy? Or why don't costume shops increase prices during Halloween (it is my experience that they have sales suring this time as well)?


Anonymous said...

When grocery stores have sales on candy, it is usually after Halloween when there is a lower demand for purchasing candy. The grocery stores that sell out of candy are the ones who have sales on candy before Halloween. With the demand for candy so high, a lowered price will attract many customers to buy their candy, not the candy two blocks away at the other grocery store.

Halloween and the holidays are good for the economy, more than just buying candy, costumes, and Christmas trees. The holidays brings people together to enjoy good times and spend money! Competitive firms around the world base their ideas and advertisements around the holidays because it brings in a large percentage of their annual income.

----Paul Moustoukas

Kind Kimberly Burky said...

I agree with Paul's thoughts on grocery store candy buyers. The stores have sales to attract customers.

The reason that costume retailers do not increase the prices of gear during Halloween, but instead lower them, could be along those same lines. People clearly NEED costumes, so they are going to buy them one place or another. Stores with lower prices are thus more attractive to consumers. Also, people who buy costumes at other times of the year generally tend to need the costumes for a specific purpose. In other words, people who buy a devil costume in March tend to have a reason for it and will pay more to buy it.

YAY economics... I wasn't really sure if we needed to comment, but I did anyways because I'm a star student. Oh, and Mr. Arjona. I know how it feels when you broke your cell phone... I most definitely got mine run over by a car this weekend. Its kinda a sad thing.

Anonymous said...

prices on candy and costumes are lower during holidays because not only does everyone need them but also everyone is selling them. You can buy candy at every grocery store, target, wallmart, every drug store. Everywhere you go stores have large amounts of candy to sell. since so many places have so much candy in supply the price goes down. People won't play as much because they can get the candy or costume at some other store.

I agree with kimberly if someone is going to buy a costume at some other time there is a reason they need to buy it and costums won't be in as high supply, so they will be willing to pay more for it.
erin clay

Anonymous said...

Well, in agreement with pretty much everyone, stores place costumes and candy on sale to compete with all of the other stores selling the same thing, thus causing more people to buy from their products.

In response to Mr. Arjona's other question about various markets and how they are affected by this holiday:
With halloween, sales on scary objects and candles increase. Also, in relation to halloween parties, alchohol and various snack items would also increase in demand. I'm not quite sure what markets would decrease in productivity, but perhaps there is a lower demand for regular clothing and makeup at this time of the year.

-Elisabeth Bentley

Anonymous said...

I agree with everyone else's points in that demand for candy and costumes is high so lowering price will result in more being sold. Lowered prices on candy and costumes before Halloween result in more profit than even lower prices afterwards, because people dont need any of that on November first. However, I think that Halloween affects the economy in more subtle ways. I'd bet that Halloween is a pretty unproductive day at the office, as people could easily be distracted thinking about a party that night, and those workers with children might come home early to take their kids trick-or-treating.
And in almost no relation to broken phones, I lost my iPod. I'm posting at 11:50 because I've spent the last hour or so looking for it.
-Andrew Gelly

Anonymous said...

When Halloween comes around, the demand obviously increases immensely for candy and costumes. So not only do candy stores and costume stores benefit, but more and more stores start selling candy like grocery stores. Now that there is more competition, candy and costume stores must decrease their prices in order to attract the customers especially now that customers need these products.

When Halloween is over, stores like grocery stores won't produce halloween candy and costumes; they will focus on other products. When this occurs, Halloween stores can raise prices again for customers that need costumes during the year and are willing to pay more for the costume because there are less substitutes.
courtney allen