Wednesday, November 22, 2006

Santa Claus Entrepreneurship


Santa Claus seems to be very popular in Germany. Not only is he popular he is also in high demand, enough for a Santa to make 55 Euros for 20 minutes of improvisation with kids on Christmas Eve. Why the short supply? I am guessing that is what keeps the wages so high. Even accounting for high opportunity costs of spending time away from family and loved ones for 6 hours on Christmas Eve these wages seem high to me. Other jobs (store counter, waiting tables or at parties) apparently pay less than half of the above mentioned per hour. Is it any specific skills? Well, women can't apply, so can't alcoholics. The Santas currently employed seem to be University students, and they need to be willing to work with kids and big groups, that would disqualify a few more people. They also need to be willing to spend time away from their family Christmas Eve which would clear out a few more people from applying. Alexander's explanation is that the families that request for a Santa do not know that 55 Euros is a lot of money for students, because their own incomes are very high. That does not seem like a very economic argument. I can understand if they value Santa so much as to pay a lot for him. Even so that does not explain the low supply in the specific job market, or competition from others who see the profit opportunity. Apparently a similar Government venture failed, and that makes a lot of sense, because they were trying to employ the unemployed in such activities, and the group of unemployed presumably is biased towards older people and those tend to alcoholism. But why isn't another senior in college starting a Santa business of his own. It seems to me that there is a windfall to be made in this segment of the market. Something is fishy!! Any ideas??

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