Scroogenomics: Why You Shouldn't Buy Presents for the Holidays

Scroogenomics: Why You Shouldn't Buy Presents for the Holidays by Joel Waldfogel

Christmas. gift giving is horribly inefficient. We waste a huge amount of money buy gifts that people do not value. We may spend $10 on something that only provides $5 of value for people. There are whole sections of "gifts" in stores, that are mostly just useful junk. We would be better off just giving cash. However, society has a cash taboo for most gifts. The author likes gift cards as a better alternative. However, he would propose changes that would donate a portion to charity after a period of time.

There are a few parts of the argument that are missed. One is the "joy" that people receive in giving gifts. Even if the gift does not provide a value equal to the cost, there is still benefit in giving gifts. The other area missed is the cost of shopping. The time the gift giver spends shopping is accounted for, but the cost of the gift recipient is not. If somebody gives me a $10 gift card, I may need to spend $20 worth of time to use it, thus costing me $10. If instead they spend $10 giving me a gift I value at $5, I have gained $5. There is also a benefit in exploration. I may receive a gift that I would not have considered purchasing, yet value. This is hinted at with a statistic mentioned that significant others provide gifts that are worth 102% of the cost spent. These are the gifts that do provide value. How can we get more of these?