Do you know about the economic impact of Halloween? Keep reading to find out!
Although Halloween is just a single day, the holiday nonetheless drives a lot of consumer spending on items like costumes and makeup, candy and party supplies, and of course, pumpkins.
American consumers love an excellent spending holiday. Whether it’s Halloween, Thanksgiving, or Christmas, people seem to open their wallets a little wider during these times. And according to the National Retail Federation (NRF), that extra spending can have a significant and positive impact on the economy.
In 2021, Americans spent a record $10.1 billion on Halloween-related purchases, making it the second biggest retail event.
Halloween spending and the economy
The Halloween industry may be more affected by the state of the economy than the economy is by Halloween. In a down economy, people may spend less on costumes, candy, pumpkins, and decorations.
Despite the COVID-19 pandemic, Halloween spending is expected to return to pre-pandemic levels in 2022. A record amount of Halloween cash was raked in by businesses in 2021, with customers spending more than $10 billion, $3 billion of that on Halloween candy, and $3.32 billion on costumes. The NRF predicts that participation in Halloween activities will return to normal in 2022.
While some may believe that increased spending around Halloween positively affects the economy, economists are quick to point out that this is not always the case. Increased spending can sometimes lead to higher gross domestic product (GDP), but it can also have negative consequences such as job loss and inflation.
Halloween is a time for fun and spending with loved ones, but let’s not forget that consumer spending during this holiday can negatively affect elsewhere. For example, some people may save money in the months leading up to Halloween in anticipation of increased spending around late October. This could lead to reduced gross spending during August and September. Others might curb their spending in November to compensate for increased Halloween spending and in expectation of Christmas spending.
Commercial and employment activities
Halloween is a time of year when people spend money on costumes, candy, and decorations. The NRF expects that 69% of consumers will celebrate the holiday in 2022, with each person spending an average of $100.45. This is the first time average spending on Halloween has gone above $100. In terms of specific items, consumers are expected to spend $3.6 billion on costumes, $3.1 billion on candy, $3.4 billion on decorations, and $600 million on greeting cards.
As Halloween approaches, stores across the country begin to stock their shelves with candy, decorations, and costumes. For some businesses, this is the busiest time of year. Pumpkin growers and candy production companies see a significant increase in demand during the weeks leading up to Halloween.
Factors to consider
According to some economists, holiday spending can negatively impact the economy. They argue that buying seasonal items such as costumes and decorations diverts resources from more productive activities.
This is because these items are only used for one day of the year. As a result, people may save less money overall, leading to a decrease in capital investment. Companies that employ people full-time year-round may also see their receipts drop as more dollars are spent on holiday goods.
Some argue that Halloween is more about exchanging goods or “payments-in-kind” (PIKs), like costumes or candy, than it is about giving lump-sum cash payments. They say this kind of exchange is less efficient in satisfying consumer wants. After all, they point out; you can usually buy whatever you value most with cash. It’s unlikely that your candy bar will be your most valued good.
What Is the Cost of Halloween?
Halloween is a time for treats, and Americans spent big in 2021. Data from the National Retail Federation shows that over $10 billion was spent on Halloween-related items like costumes, candy, decorations, and greeting cards.
What Makes Halloween So Popular?
Halloween is a popular holiday in the United States, and Americans spend a lot of money preparing for it each year. One of the reasons for this is that Halloween is celebrated across the country and is not specific to any region, religious group, or demographic. Another reason is that Halloween is typically associated with buying many consumer goods, like costumes, candy, and decorations. And finally, the nature of Halloween means that families who celebrate it will likely have to make new purchases every year—for example, getting more giant costumes as children grow or buying new candy.
Which age group spends the most on Halloween?
The average person spends $103 on Halloween, but people aged 35-44 reported spending $149.34 on the holiday, making them the biggest spenders. This comes from data from the National Retail Federation.
Is Halloween the beginning of the holiday shopping season?
A national survey found that nearly half of consumers planned to shop for Halloween 2022 well before the holiday, with some starting as early as September 2022. This indicates that many people are already thinking about and preparing for next year’s Halloween celebration.
What It All Means
This is a fun time for children to dress up and go trick-or-treating, but did you know it also has some economic benefits? According to Jeffrey A. Tucker, an analyst for the Ludwig von Mises Institute, Halloween can teach kids valuable lessons about working for rewards, bartering, and the importance of appearance.
So next time you’re enjoying some Halloween candy, remember that this holiday is also good for the economy.