Halloween: An Economic Nightmare

Boo! Here are some excerpts from an article published yesterday for Bloomberg by Kevin Hassett, a scholar at the American Enterprise Institute for Public Policy Research:

The National Confectioners Association estimates that 2005 Halloween sales were $2.1 billion, easily making Halloween the biggest candy season. This year, sales will certainly be higher.

What percentage of those sales end up providing candy that individuals don’t really like? If my own careful scientific study of Halloween bags is any guide, perhaps about 75 percent.

It’s not the dead that concern me about Halloween. And it is not the impact of all that sugar on the weight of our kids. No, it’s the dead-weight loss, or pointless lost utility of the entire enterprise. That likely has a dollar value that exceeds $1.5 billion annually. American citizens squander more than a billion and a half dollars a year on an economically inefficient holiday.

So let’s do something to reform Halloween. The first step would be for Halloween donors to give kids money instead of candy. Kids could then go to the supermarket the next day and binge on the candies they really like. That solution would get an A-plus in economics.

So, his argument is that the first law of economics would be that lump-sum transfers are more economically efficient than in-kind transfers. If you are going to give a gift to somebody, you should just give them the money. They will be a better judge of the best way to spend it. I guess the same theory applies for birthdays and religious holidays as well, but money is just so … impersonal.

He continues:

Many schools prohibit children from taking Halloween candy onto the premises. That is exactly the wrong policy. Schools should encourage all children to bring their entire haul to school, and allow them a lengthy period to trade candies among themselves. That way, the Take 5s and the 100 Grand bars will find their way to individuals who cherish them.

Of course, nobody will take the Charleston Chews, so we should also consider a federal block grant to local school districts to support environmentally friendly disposal of the candy.

And Halloween used to be such a simple holiday!

2 thoughts on “Halloween: An Economic Nightmare”

Leave a Reply