Ben Muse

How to Squeeze the Most Happiness from a Gift Card

In 1994 you couldn't buy one of those plastic retail gift cards with magnetic strips to track the balance of the gift.  The Mobil Oil Company sold the first ones in 1995.

Jennifer Pate Offenberg pulled some research on gift cards from her Ph.D. thesis and reported on the market place in the Spring 2007 Journal of Economic Perspectives (Markets. Gift Cards).  Look at how the business has grown:

Aleut Island Christmas: 1880

Alaska was Russian before it was part of the United States, and the Russian influence is still felt - especially in the Orthodox religion and religious architecture.  In 1879-80, the Pribilof Aleuts celebrated the Russian Orthodox Christmas, rather than the Western, December 25th, Christmas.

In 1879, Libby Beaman followed her husband to St. Paul Island in the Pribilofs - remote islands in the middle of the Bering Sea - when he was appointed as a government agent to supervise the local fur seal harvest.  Beaman was a remarkable woman - the ship captain who took her thought she was the first western woman to go to the Aleutians and the Pribilofs.  She was repeatedly warned off, because of the rigors of life there.

The Beamans arrived in May 1879, basing themselves in the village of St. Paul on St. Paul Island:

The village of St. Paul... presented a pretty picture.  It is built up a steep slope away from the harbor, where small boards of skin called bidarkahs and the bidarrahs are pulled up on the little wharf.  Low hills surround the village... Government House... sits high on the central slope overlooking the roofs of the other houses.  But it is not Government House that dominates the scene.  The vivid blue onion dome of the Orthodox church gives cohesion and charm to the scene and gathers unto itself the neat white frame buildings of the Alaska Commercial Company and the eighty white frame houses of the eighty Aleut Families it serves.

St.Paul Island was uninhabitated when the Russians arrived in Alaska.  The Russians introduced the Aleuts to the island in the 1790s to harvest fur seals.  When the Beamans arrived in 1879, the Aleuts had been there for almost 90 years,  almost 80 of these under the Russians, and just over ten under the Americans.

At this time, the fur seal harvest was conducted by the Alaska Commercial Company.  The Company had leased the harvesting rights from the government.  Jeanne van Nostrand tells the story of the seal harvest during this period: “The seals are about gone…” (American Heritage, June 1963).  van Nostrand is critical of the Company's operations, and of the government agents - implicitly including Beaman's husband - who supervised them.

Here is St. Paul in 1896, about 16 years after the Beamans were there:

This picture was obtained from a University of Washington online collection.  Several other 1896 photos of St. Paul Island are available there.

When the Russian Christmas arrived, in early January, 1880, Libby Beaman recorded her impressions: 

Secondary market for Christmas presents

The Dulles Town Square (this sounds like a mall) is sponsoring a post-Christmas exchange for unwanted gifts: "For the Rejects Of Christmas, A 2nd Chance" (Rosalind Helderman, Washington Post, 12-29-04, B01)

The mall has set up a table, set out cookies, made participants eligible for a raffle, and advertised. People who got stuff for Christmas that they don't want (has to be worth more than $10) set their gift on a table, taking some other gift in exchange. The mall creates the market in hopes of increasing customer traffic. At the end of the week excess gifts will be donated to charity.

Have the Dulles Town Square and eBay reduced the potential for deadweight losses associated with Christmas gift giving? Now, if you are given a present that you don't value at its market price, you can sell it on eBay for relatively modest transactions costs.

I don't think the Dulles Town Square can be very far from George Mason. I'm trying not to imagine Tyler Cowen and his mother, surprising each other at the table as they exchange the gifts they gave each other.

John Palmer looks at the practice of re-gifting.

Sebastian Montero

One last post before Christmas.

Geitner Simmons' blog "Regions of Mind" treats U.S. regional history, and especially southern and western history. Earlier this month he wrote a moving post on Spanish missionary efforts in the Carolinas in 1567-1568: "Mission"

Sebastian Montero, chaplain of the Spanish Juan Pardo expedition and the subject of the post, worked for about 18 months, starting in February 1567, preaching to the Carolina Indians. Montero's work "can be considered 'the first authenticated missionary success with the North American Indians.' "

If Montero was there for 18 months, from February 1567, he would have spent Christmas 1567 in this work. This Christmas I'm trying to imagine him there.

Anyway, not really a Christmas post, but a fascinating bit of U.S. history, and a good introduction to a great blog.

What sort of Christmas presents should I give?

Tim Harford weighs in with some guidance for a more efficient Christmas:Dear Economist, by Tim Harford: The deadweight loss of Christmas

Thanks to Tyler Cowen for the pointer.

Outsourcing the hall decking

A week ago Gwedolyn Bounds of the Wall Street Journal reported on the growth in the market for Christmas home decorating: "Instant Christmas Spirit: Hire the Experts to Trim the Tree" (WSJ, December 14) :

"There have long been pockets of wealthy people happy to outsource the headaches of holiday decorating. But the combined pressures of a time-crunched culture and more geographically separated families where adult kids often can't get home to help elderly parents trim the tree, has created a ripe entrepreneurial niche catering to the general masses. From landscapers who survive the slow season festooning trees and houses with lights, to florists, painters, and even exterminators, a growing number of small business owners are earning fees ranging from a few hundred dollars to $30,000 and up to deck homeowners' halls inside and out...

Helping fuel the trend, of course, is a growing acceptance that it's OK to pay someone to do tasks that once seemed intensely personal, such as wrapping gifts or addressing holiday cards. While some people have physical disabilities or personal situations that mean they require aid, others choose pros for the convenience...

The urge to decorate bigger and better each year is one natural extension of hiring a pro..."

One decorator noted:

"The family is more separated today. One kid is doing e-mail, another kid is on a videogame, the dad is reading the paper and mom is doing something else."

The implication is that they don't have time for joint work on a decorating project.

This is a great opportunity for many small businesses. It provides filler work for landscapers and others during a slow period:

"Ms. Schuster says she and her husband used to plow snow to keep their Terra-Firma Landscape business going during the winter months. "But it's a very unpredictable business and hard on a life-style," she notes. Christmas, however, "comes every year on the same day."...

This business has a very short season (starts after Thanksgiving and peaks on the two weekends before Christmas). At least one firm, Christmas Decor, operates nationally, with 268 franchises. Sales were $350,000 in 1996, but should be $55 to $65 million this year - about three-quarters from residential business.

The demand is shifting out as the opportunity cost of time on alternative activities, and incomes, increase. To the extent that work once done within the family is not shifted to the market, apparent GDP goes up, despite the fact that no actual national output hasn't.

Christmas is coming. What should I serve my friends?

When you want to know the correct wine to serve, you should go to an economist.

Lynne Kiesling addresses the problem here: "Wine Recommendations For Holiday Entertaining".

In 2003 Professor Bainbridge served "Schramsberg Blanc de Noirs (California) 1999" at a party. In 2003 he also provided some wine notes for Thanksgiving - I'd bet these would work for Christmas as well: "Thanksgiving Wine Notes". And here is some advice on "Sparklers for New Years". Bainbridge devotes a whole blog to wine: "Professor Bainbridge on Wine". I'm sure the advice there is good.

Nobel prize winner Daniel McFadden has his own vineyard in Napa Valley. Kevin Courtney of the Napa Register reports:

"McFadden's neighbors in Soda Canyon know him not as a professor who
makes pronouncements on national issues, but as a man with a yearning
to make ever better wine. Growing grapes wasn't the idea when his
wife, a photographer, stumbled upon the Soda Canyon property in
1992. They simply wanted a country get-away. Banchero Vineyard had
begun winemaking there in 1880, but by 1992 all that was left of the
original operation was the stone base of the wine cellar. The
vineyards had long since disappeared. That was fine with McFadden. It
was enough that the operation had cows and chickens and some ancient
olive trees. "A little working farm," as he put it.

Two years later, a new friend at Atlas Peak Vineyards discovered a row
of over-ripe cabernet sauvignon and merlot fruit that had been missed
at picking. Did he want it? "I didn't know anything about it. I was
sort of thrown off the dock," said McFadden, who scrambled to buy and
learn the winemaking basics. "It turned out to be a marvelous
wine. It made a luscious, fruity, meaty wine," said McFadden, who soon
signed up for winemaking courses with his wife at UC-Davis. He
planted 3,500 vines on two acres, most of it in cabernet sauvignon
which he sells to Dave Cronin at Blackford Wines. He makes a barrel or
two for family use, lavishing extra care on his zinfandel. Ever the
academic, McFadden is one of the organizers of this year's annual
meeting of the Vineyard Data Classification Society, an international
group that focuses on the quantitative and analytic study of vineyard
and wine technologies.

McFadden has occasionally tried to marry his economic research with
his new interest in wine, with less than spectacular results. His
statistical tool, discrete choice analysis, showed how a restaurant
could sell more high-profit wine, he said. The trick is to charge the
same price as a wine of inferior reputation and lower profit margin.
Seeing the two choices next to each other on a wine list, diners will
feel compelled to buy the wine with the greater profit, he said. When
McFadden told this to a friend in the restaurant business, "He said,
'Tell me something I don't know.'" "

Christmas is coming. How should we behave?

G.K. Chesterton has some advice:

"And now I have to touch upon a very sad matter. There are in the modern world an admirable class of persons who really make protest on behalf of that antiqua pulchritudo of which Augustine spoke, who do long for the old feasts and formalities of the childhood of the world. William Morris and his followers showed how much brighter were the dark ages than the age of Manchester. Mr. W. B. Yeats frames his steps in prehistoric dances, but no man knows and joins his voice to forgotten choruses that no one but he can hear. Mr. George Moore collects every fragment of Irish paganism that the forgetfulness of the Catholic Church has left or possibly her wisdom preserved. There are innumerable persons with eye-glasses and green garments who pray for the return of the maypole or the Olympian games. But there is about these people a haunting and alarming something which suggests that it is just possible that they do not keep Christmas. It is painful to regard human nature in such a light, but it seems somehow possible that Mr. George Moore does not wave his spoon and shout when the pudding is set alight. It is even possible that Mr. W. B. Yeats never pulls crackers. If so, where is the sense of all their dreams of festive traditions? Here is a solid and ancient festive tradition still plying a roaring trade in the streets, and they think it vulgar. If this is so, let them be very certain of this, that they are the kind of people who in the time of the maypole would have thought the maypole vulgar; who in the time of the Canterbury pilgrimage would have thought the Canterbury pilgrimage vulgar; who in the time of the Olympian games would have thought the Olympian games vulgar. Nor can there be any reasonable doubt that they were vulgar. Let no man deceive himself; if by vulgarity we mean coarseness of speech, rowdiness of behaviour, gossip, horseplay, and some heavy drinking, vulgarity there always was wherever there was joy, wherever there was faith in the gods. Wherever you have belief you will have hilarity, wherever you have hilarity you will have some dangers. And as creed and mythology produce this gross and vigorous life, so in its turn this gross and vigorous life will always produce creed and mythology. If we ever get the English back on to the English land they will become again a religious people, if all goes well, a superstitious people. The absence from modern life of both the higher and lower forms of faith is largely due to a divorce from nature and the trees and clouds. If we have no more turnip ghosts it is chiefly from the lack of turnips."

This paragraph is taken from Chapter VI "Christmas and the Aesthetes" in Chesterton's book Heretics. The full chapter is available at "LiteratureClassics.com.

King Island Christmas

King Island is a remote island in the northern Bering Sea.  There used to be an Inupiat Eskimo village on it, Ukivok.  Ukivok was perched precariously on a cliff overlooking the ocean.  Ukivok was abandoned almost 40 years ago, but this picture from 1978 (some years after the village was abandoned) suggests what it was like:

Source: NOAA

Rie Munoz and her husband Juan went to King Island as teachers in 1951, apparently spending nine months.  She's posted Juan's photos of life on the Island, here: "King Island". 

During the winter the 150-200 residents of King Island were cut off from the rest of the world by sea ice.  The year that Rie and her husband were on the island the last ship for the winter arrived, but was unable to drop off supplies and the priest for the Christmas celebration, because of the weather.  The islanders carried a light boat made of walrus skin (an oomiak - see Juan's pictures) over the center of the island to the more protected side, in order to bring the priest and supplies in.  Rie and Juneau author Jean Rogers later wrote and illustrated the story for a childrens' book: King Island Christmas.  Subsequently the book was used as the basis for a musical play.   The story behind the play may be found here: "How King Island Came to Be".

On Sunday the Juneau Empire carried an Associated Press story by Rachel D'Oro on an Oregon State University project to do archeological work on the island, and to collect oral history from people who used to live there: "Research team to study one of Alaska's ghost villages".  How did people live on this island?  Why did they leave? D'Oro says,

"The island was named in 1778 by British explorer Capt. James Cook for James King, a member of his party. But it's unclear how long Inupiats lived there.

A century ago, about 200 people dwelled in walrus-skin homes tacked to the face of the cliffs. They hunted walrus, seal and seabirds and collected berries and plants. Every summer, they traveled by kayak and skin boat to the mainland 40 miles to the east, camping near Nome, where they sold ivory carvings.

Starting in the 1950s, fewer people returned to King Island. The 1960 U.S. Census counted only 49 residents. The 1970 census found none. King Island is among 16 federally recognized Native villages that were deserted or used as seasonal camps.

Today, many former King Island residents and their descendants live in Nome.

Kingston said several factors contributed to the demise of King Island. Pregnant women were choosing to stay in Nome, where there were doctors. Many of the men were drafted into the military during World War II. In the late 1940s and 1950s, tuberculosis killed some people and hospitalized others. And ultimately, as with other Alaska villages vacated in modern times, paying jobs were available in more accessible towns."

A nice story with details of life on the island that I haven't copied over here.

There are more King Island posts here: King Island.

What to give for Christmas

Tyler Cowen's advice is based on the most up to date scientific results: "What are the best Christmas gifts?".

The Economics of Christmas Lights

Virginia Postrel on the economics of Christmas lights, in this Reason Online column: "Light Unto the Wealth of Nations.  How Christmas displays illuminate a strong economy ".