The Soul of Enterprise: Business in the Transformation Economy by THRESHOLD Episode 22 - Scroogenomics: Why You Shouldn't Buy Presents for the Holidays
Nov 28, 2014
On the biggest shopping day of the year, hosts discuss a thought-provoking book arguing that holiday gift-giving can lead to a staggering $12 billion economic loss. They explore the concept of deadweight loss with humorous examples of unwanted gifts. The conversation covers spending frameworks, impacts of relationship proximity on gift value, and the time wasted during holiday shopping. They suggest alternatives like cash and gift cards, while reflecting on international gift-giving trends and the commercialization of Christmas.
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Gift Giving Creates Deadweight Loss
- Joel Waldfogel argues holiday gift-giving creates measurable economic deadweight loss.
- Gifts often deliver less value to recipients than the giver paid, destroying aggregate value.
What Deadweight Loss Means
- Deadweight loss means the recipient values the gift less than its cost.
- Waldfogel estimates many gifts are worth notably less than what spenders pay.
Measured Value Shortfall Of Gifts
- Waldfogel estimates the average gift returns about 88% of its monetary value to recipients.
- Using 2007 data he calculated roughly an 18% deadweight loss totaling about $12 billion.
