Thursday, November 19, 2009

The Dead Weight Loss of Xmas

Ever get a Christmas gift you hated? Of course you have. Would you have spent that money differently if given the cash instead of the gift? Hell yes! Therefore, gift giving creates what economists call a "dead weight loss".....a loss of welfare based on the fact that money is spent on things people don't want.

I didn't think of this myself. It is the idea of an economist named Joel Waldfogel. He first published his paper on the subject in 1993, and you can read the whole thing HERE if you are so inclined. Waldfogel has now published a book on the subject, called, appropriately "Scroogenomics: Why you shouldn't buy presents for the Holidays".

Hey, they don't call Economics "the dismal science" for nothing! Try giving a handful of bills to your wife or girlfriend and using this to explain that is actually MORE thoughtful than jewelry or a fur......and let us all know how that goes for you, if you are still alive! As if Christmas wasn't hard enough for us guys, now we have to select gifts so good there is no dead weight loss. Oy Vey!

And to my good friend Budd Bailey, whose sister is world famous for her horrible gift selection, well, I guess you can call Jane "The Queen of the Dead Weight Loss!"


infogoddess said...

this is one of the reasons why I no longer do seasonal gift-giving - I pick a charity and make a donation instead

Budd Bailey said...

I wonder what ever happened to my bright orange, Syracuse University toilet seat? Yup, a Christmas gift.