Greater than 100,000 households – lots of them amongst the poorest in Britain – put cash apart for Christmas presents and different seasonal treats in a financial savings membership referred to as Farepak. It wasn’t a financial institution, and it wasn’t nice worth for cash… and it went bust. Youngsters went with out toys, and festive dinner tables have been left naked.
Why would somebody put their hard-earned cash into such a scheme? And what does it inform us about the best way we frequently view Christmas as a time for frenzied spending?
Cautionary Tales is written by me, Tim Harford, with Andrew Wright. It’s produced by Ryan Dilley, with help from Courtney Guarino and Emily Vaughn.
The sound design and authentic music is the work of Pascal Wyse. Julia Barton edited the scripts.
Due to the group at Pushkin Industries, together with Mia Lobel, Jacob Weisberg, Heather Fain, Jon Schnaars, Carly Migliori, Eric Sandler, Emily Rostek, Royston Beserve, Maggie Taylor, Nicole Morano, Daniella Lakhan and Maya Koenig.
Additional studying and listening
A lot of Joel Waldfogel’s analysis on the economics of Christmas is gathered in his transient and witty e-book, Scroogenomics.
In describing the Farepak case, I’ve relied on reporting by Anna Burnside in The Sunday Instances (16 December 2007), Steve Hen in The Instances (15 November 2006), Chris Tighe within the Monetary Instances (11 November 2006), Adam Jones within the Monetary Instances (16 November 2012), Rupert Jones within the Guardian (18 April 2022) and Rob Sharp within the Observer (19 November 2006). The Centre for Crime and Justice Research, together with Unison, interviewed Farepak prospects after the agency’s collapse. Penelope Visman’s letter was revealed within the Monetary Instances on 30 December 2006.
The educational analysis on the totally different views taken by givers and receivers is:
Francesca Gino, Francis J. Flynn, Give them what they need: The advantages of explicitness in present trade,
Journal of Experimental Social Psychology Quantity 47, Subject 5, 2011.
Francis J. Flynn, Gabrielle S. Adams, Cash can’t purchase love: Uneven beliefs about present value and emotions of appreciation, Journal of Experimental Social Psychology, Quantity 45, Subject 2, 2009.