Christmas Giving Is ‘Orgy of Value Destruction,’ Waldfogel Says

[FarCenter]

http://www.bloomberg.com/apps/news?pid=20601093&sid=axos2JGM.KB0
By Jennifer Ryan

Dec. 4 (Bloomberg) -- Christmas is a waste of money because people who give presents overestimate how much recipients will enjoy their offerings, economist Joel Waldfogel said.

“The way we celebrate Christmas around the developed world is with an orgy of value destruction that vaporizes $25 billion per year,” he said in a lecture in London yesterday. “People value the items they receive as gifts 20 percent less per dollar spent than the items they purchase for themselves. These are items that are not well-suited for their tastes.”

Waldfogel, an economics professor at the University of Pennsylvania’s Wharton School, is the author of “Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays.” His findings use surveys of people about presents they received during a season that prompts about $65 billion of spending on gifts in the U.S. and a jump in retail sales in Europe and Japan.

“Givers who are in less-frequent contact with the recipients tend to do a lot worse than givers who are in more frequent contact,” he said. “It’s not that grandparents and aunts and uncles are inherently bad at this. It’s that they don’t see the recipient very often, and whose fault is that?”

One obvious way to remove the waste from gift-giving would be to give cash, since that would provide recipients freedom to buy exactly what they want, Waldfogel said. That’s not really possible since social conventions often frown upon using money as a present.

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[roody]

1. Decolonize your mind. You do not have to participate in this.

[ret5hd]

2. Young nieces and nephews: cash. Elderly: cash. Those in need: cash...

My wife: something that is given thought.
Most everyone else: nada

In other words, i agree with the author.

[jgraz]

8. Shit, I was hoping you'd go with "wife: cash"

That would really have simplified my shopping this year. ;)

[cali]

3. I enjoy giving gifts at Christmas. I do it for my pleasure at least as much

as for the recipient. That said, I don't buy new gifts. I make them or I buy things at funky little used stores and I never spend more than 8 bucks per gift.

[Nikki Stone1]

4. This is why I buy few presents, and ask people what they want.

Everyone else gets chocolate, coffee or wine.

[JackintheGreen]

5. Amen!

I've been trying for years to get my family to give fewer presents and NO CHRISTMAS LISTS, which I think are just a lazy crutch.

My deal is this: do not tell me what you want. If I do not know you well enough to give you something you will enjoy and use, I don't know you well enough to justify giving you a present, any present.

[azmouse]

6. I stopped the Christmas gift nonsense many, many years ago.

Everyone is a lot happier staying out of the crowded stores, spending less money and having less aggravation.

I still see that my mom and MIL have a little something at this time of year but no one else.
Charities get a check. It's a better use for the money than buying someone a Chia Pet.

[Taitertots]

7. That makes bad economic sense

First it would cause a giant drop in consumption from people not buying christmas gifts.

Second there would be effects caused by people getting and holding money, and people decreasing their bank account balances to cover it.

Third it might not be possible. With so many people relying on credit there might not be enough liquidity to cover it. Unless people take cash advances, a notoriously bad idea.

[clear eye]

9. This is an argument against all gift-giving. Rather pitiful.

I've always thought of Christmas as a sort of potlatch, where those w/ fewer resources, especially children, got stuff from those w/ more. Native Americans of the NW held those in the winter, too.

My nieces, who live at a distance, love what I get them. Some things have been more successful than others. At times I've really scored big--like giving one a perfume that she raved for months about, and the other a little red velvet jacket that she wore a couple of times a week until she outgrew it. When they were little I used to get them a lot of software. They sometimes forgot where they got it, but they spent many happy, creative hours with the programs I picked out. (I tended to pick out things like a make your own book program, and another that had pre-programed characters who would say the lines the child wrote and engage in a choice of actions to create a short animation.) I tried a build your own virtual machine one, but that didn't grab them.

Whatever they thought the gifts were worth, I got my money's worth and more from them.

[FarCenter]

12. Borrowing money to buy gifts is an even worse idea

Not only is there the probability that the giver paid more than the recipient would have, but the giver also sends a gift of interest to out favorite charity -- the banks.

[clear eye]

13. I think you meant to reply to the post above mine?

No?

[treestar]

10. The value of the item doesn't go away because the individual recipient

doesn't want it.

They could sell it on e-bay.

[whosinpower]

11. Our new strategy with gift giving

We make most of our gifts.

It has become a big deal in our home - planning and putting together gift baskets with a variety of home made goodies and treats. Even our teenage son has gotten in on the action.