Halloween spending is projected to reach a record $13.1 billion this year, according to the National Retail Federation, more than twice what it was a decade ago. Yet even as concerns about financial instability rise, our spending habits continue to grow. Why? 



Consumers aren’t necessarily purchasing more, but rather consumption has become more expensive. One such reason for this hike in prices is the recent trade war with China. Large tariffs have been slapped onto more than 85% of our costumes and decorations. This means companies are paying more to import goods, which forces them to increase prices for consumers.   



The rise in prices, paired with the rise in financial worry, would lead many to assume that a decline in Halloween consumption is imminent, however this doesn’t happen. The reasoning lies with price elasticity, which explains how different changes in price affects a product’s demand. In this instance, Halloween products are price inelastic, meaning that a rise in prices does little to change demand. To better understand why this happens, we need to use behavioral and cultural economics. 



The main determinant to consider for Halloween elasticity is luxury versus necessities. Certain goods like insulin will see little change in quantity demanded after an increase in price because people require these goods in their lives, regardless of price. In our case, much of the value that comes from Halloween is symbolic. Halloween is so engrained in our culture, spending is seen more as a cultural necessity rather than an economic luxury. This necessity can be clarified with the concept of Herd Behavior, where people tend to follow what those around them are doing, instead of making individual decisions. Halloween is a very publicly observable holiday, with everyone in the community participating, so it would feel more like a cost than a benefit to go against that, no matter your financial situation.



You could also consider the concept of Warm Glow, which refers to the satisfaction people feel from giving gifts, like candy to kids on Halloween. This emotional reward influences our consumer choices by giving value to the act of spending itself. Giving out candy to children during Halloween doesn’t just make the kids happy, it does wonders to adults as well.   



Thus while the financial costs for Halloween are on the rise and are making the beloved holiday less financially friendly, it’s going to be a long time before the cultural and social benefits aren’t outweighing those costs.











Work Cited:



“NRF Consumer Survey Finds Halloween Spending to Reach Record $13.1 Billion”

National Retail Foundation

https://nrf.com/media-center/press-releases/nrf-consumer-survey-finds-halloween-spending-to-reach-record-13-1-billion 



Kim Parker and Luona Lin “Growing share of U.S. adults say their personal finances will be worse a year from now”, PEW Research Center

https://www.pewresearch.org/short-reads/2025/05/07/growing-share-of-us-adults-say-their-personal-finances-will-be-worse-a-year-from-now/ 





Nia Law et al, “Tricks, Treats, and Tariffs: How Trump Is Making Halloween More Expensive” The Century Foundation

https://tcf.org/content/commentary/tricks-treats-and-tariffs-how-trump-is-making-halloween-more-expensive/ 





The Investopedia Team “Price Elasticity of Demand: Meaning, Types, and Factors That Impact It” Reviewed David Kindness

https://www.investopedia.com/terms/p/priceelasticity.asp 



“Herd Behavior” Behavioral Economics Institute

https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/herd-behavior/ 



Dan Pilat and Dr. Sekoul Krastev “Warm Glow Giving” The Decision Lab

https://thedecisionlab.com/reference-guide/psychology/warm-glow-giving