Stop buying Christmas presents for people you do not really know well, says an economist
Straits Times 12 Dec 09;
London - Ever had a present from an over-enthusiastic colleague or a far-flung aunt or someone you really did not like but were socially obliged to pretend otherwise?
One economist is on a mission to stop this wasteful category of Christmas giving.
How often have we given them? Many times, no doubt. And yet, how often have we ever really wanted to receive them ourselves? Whose every waking moment is filled by a craving for a pair of half-sized martini glasses, holding unpleasantly perfumed gel candles?
Economist Joel Waldfogel takes this feeling of dissatisfaction further. He studied the giving of gifts for 15 years. The results do not make for happy reading.
'Other people do a poor job choosing for us, compared to when we choose for ourselves,' he says.
He has just released his book, Scroogenomics: Why You Shouldn't Buy Presents For The Holidays.
Christmas gifts are a big waste, he says. Over the years, his surveys asked people how much they would have paid for gifts had they not received them. The average the recipient would have paid is nearly 20 per cent less than what was actually paid.
This is the kind of thing that economists do not like. The ideal in economics is that surplus value is created. 'The seller gets a price that exceeds his costs and the buyer gets an item he values above the price,' he explains.
In the Christmas present market, the second part of the equation often fails. And with people spending US$145 billion (S$201 billion) a year worldwide on festive items, that could be more than US$25 billion of waste, he says.
He emphasises that he is not advocating the end of Christmas presents as a concept. 'We do pretty well in buying things for people we know well. And children would be devastated if they didn't get presents.' But when it comes to buying for people who live far away or who we do not know well, he thinks we might give gift vouchers a try instead.
Of course, this does throw up a problem or two.
Anyone who has seen the episode of Seinfeld where Jerry commits a major faux pas, by giving Elaine cash for her birthday, would be wary about doing the same. And gift vouchers seem close to that.
Mr Waldfogel disagrees. 'Gift vouchers are unlike cash in that they avoid the awkwardness.'
But gift vouchers also often lie dormant in dark recesses of the recipient's cupboards, never to emerge. He wants retailers to accept a measure that allows vouchers to expire and trigger a donation of the value to charity. And, he suggests, a present of a donation to charity, should be acceptable.
Professor Gary Davies of Manchester Business School is not a fan of abandoning gifts for people we do not know that well. 'It isn't the economics that is driving the issue. It's the social side, the symbolism of the gift.'
And the kind of gift scenario where the protagonists do not know each other well can be a social minefield, with the giving of cash or vouchers being seen as plain odd.
'It would be seen as a bribe,' says Mr Davies. 'There are lots of business gifts. I will give my secretary a bottle of champagne. Am I supposed to give her money? I think she might be taken aback. It would be seen as inappropriate.'
And of course, that is at the root of gift giving - it is a social transaction, not an exchange of useful items.
'What we like is the fact that our nearest and dearest have thought about it,' he says. 'One of the main social aspects of gifting is building a relationship.'
And there would also be economic consequences if people suddenly stopped buying presents. Typically half of retailers' profits come from the fourth quarter, he adds.
But in opposition to the economic benefit, there is also the sheer waste of unwanted presents. 'One can imagine a market for green gifts, buying people experiences that don't involve tangible products,' he says.
BBC News
