Book Review – Scroogeonomics

Interesting, if pessimistic analysis of Christmas by economist Joel Waldfogel in his book Scroogeonomics, based on a previous article written in 1993 for the American Economic Review on the ‘Deadweight loss of Christmas’. Basically, people are bad at buying presents for others. So bad in fact that the value is often less to the recipient than the cost of the gift. The effect is greater depending on how well the gift giver knows the recipient, as the chart below shows, it’s not all bad news though, spouses are able to create value with gifts.

Relationship Value lost in gift giving
Distant relative -20%
Friends -9%
Parents -3%
Siblings -1%
Spouse +2%

Of course, only an economist could analyze Christmas in this way (and count the cost at $4 billion), but the implication is that money, or gift cards are the way to go.

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