Don't Feel Guilty — The Holidays Are A 'Macroeconomic Cheat Day'

Researchers have learned the frenzy and excitement of the holiday season makes us all a little crazy. But that might not be a bad thing for our financial lives.

ARI SHAPIRO, HOST:

Friday kicks off the holiday shopping season.

AUDIE CORNISH, HOST:

What do you mean? Wait a second. Wait a second. I'm pretty sure it starts right now.

SHAPIRO: OK, fair. The holiday shopping season is already here. And this year, the economy is doing better, so retailers are feeling pretty good. They are counting on a frenzy. And researchers have learned that frenzy can take its toll on us. NPR's Sonari Glinton explores why that could actually be good for us as consumers.

SONARI GLINTON, BYLINE: This story is what we call here at NPR a setup piece. My assignment is to get you ready for the holiday shopping season. Now, usually I like to start these pieces with a montage of my favorite holiday commercials to set the mood.

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UNIDENTIFIED MAN #1: This Black Friday at Sports Authority, door busters start at 6 p.m. on Thursday.

UNIDENTIFIED MAN #2: Or shop in-store when doors open Thursday at 5 p.m.

UNIDENTIFIED WOMAN #1: This just in. Macy's is giving away a million dollars in prizes on...

UNIDENTIFIED MAN #3: Black Friday is here early, so let's get charged up.

GLINTON: OK, holiday commercial montage - check. Then I reach out to the retail analyst Howard Davidowitz by phone - always by phone. He usually tells us how crazy this whole thing is.

HOWARD DAVIDOWITZ: Well, first of all, waiting in lines and going out and doing all this stuff in the cold is certifiably mad.

GLINTON: Davidowitz says, it's madness because many of the deals can be had online. And he says, the real deals can be had if you just have a little patience.

DAVIDOWITZ: If you look and track the pattern of sales at the holiday season, it all comes in the last few days. Why is that? Because that's when the prices are the lowest.

GLINTON: OK, so here's the time in the piece where I begin to wonder, why do we act this way then?

DAN ARIELY: The interesting about this shopping season is that we get a social justification to buy things.

GLINTON: Dan Ariely studies behavioral economics at Duke University. He says, it's not necessarily about deals. We get discounts and deals all the time. There's this idea called social proof.

ARIELY: Social proof is the idea that, often, what we do is not about what's right or wrong. It's about what other people are doing. We see other people standing in line, and we say hey, this must be a good idea. So all of the sudden, we see lots of people acting, and they basically invoke this herding behavior within us. And we say, we should be behaving like this, as well, and then we follow the rule.

GLINTON: So part of the reason people stand in line on Thanksgiving is because now people stand in line on Thanksgiving. And social justification - that allows us to say to ourselves, I don't normally stand in the cold, but this is different because it's the holidays.

ARIELY: And that's a once-in-a-year period. But if you buy on the regular Tuesday in March, you would say to yourself, I'm the kind of person who just goes on a whim and buy in general. Let me keep on behaving like this. And now there's really no boundary.

GLINTON: Now, this will sound a bit weird on the eve of Thanksgiving, but Ariely says, the holiday shopping season actually works overall to curb consumption.

ARIELY: But it's possible that if we didn't have this holiday season, the way shopping would work is we would buy a little bit more throughout the year, but it would accumulate to being more than what we shop for right now.

GLINTON: This actually might be like our larger economic governor that keeps us from being just crazy all the time.

ARIELY: Yeah, and by the way, here's another example of this - Weight Watchers. You know, Weight Watchers allows you to go crazy once in a while - right? - because they say if you don't go crazy once in a while, you will not be able to sustain the diet in the other places.

GLINTON: So the holiday is like a big macroeconomic cheat day, so let's wrap up with a look forward to what we can expect from the holiday season. Katherine Grannis from the National Retail Federation says, last year, there was a government shutdown and the weather was terrible, and all that put retailers into a funk.

KATHERINE GRANNIS: We do feel that that kind of funk has lifted and that, you know, that cloud has lifted and that the fog is clearing, and we may actually have a real reason to be optimistic this holiday season.

GLINTON: So now that the funk is lifted, are you ready for shopping? Oh, yeah, got to have that Thanksgiving dinner first. Sonari Glinton, NPR News.

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