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The setting really helps you to see the impoverishment of the cousins and how they make themselves happy. When they are home, it is a little dark and unfriendly until they begin to make the fruit cakes. When this happens, it transforms into a Christmas wonderland. Also, think about Haha's bar, much like the man, dark and dreary, but they bring a light in his life by being so good. I think the setting is muted because we are seeing it though the eyes of a child and someone with a developmental disability. The setting really helps the reader connect with the story and the sensory details make it happen the most by letting us experience it with the characters.
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