What is the point of exchanging Christmas presents?
About one person in 20 will answer, “To get the stuff that people give to me, of course!” This answer is so obvious to the author of the new book Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays that he does not even feel the need to ask the question before he leaps into his explanation of how economically inefficient it is.
The author, economist Joel Waldfogel, collected subjective reports of the value of holiday gifts from the people who received them, in order to estimate that roughly 25 percent of the value was destroyed by the gift-giving process. Put more simply, people tend to be disappointed by the gifts they receive, as the items they receive are subjectively worth about 25 percent less than was spent on them. This is a higher degree of disappointment than is found in things that people buy for themselves. Or, to put it another way, you would get more stuff if, instead of buying anything for anyone, you spent all the money on yourself. In this sense, commercialized gift-giving is inefficient. And the main purpose of the book is to persuade readers to buy things for themselves instead of giving gifts because that will be more efficient.
If this view sounds crass, well, Waldfogel warned you about that with the book’s title. The title starts, after all, with the name Scrooge, the fictional character who popularized the phrase, “Bah! Humbug!” as a response to celebrations of the Christmas holiday. Scrooge, though, had a change of heart at at the end of the story, and decided that Christmas gift-giving made some sense after all. Waldfogel does not have a similar change of heart, but grudgingly offers advice on ways to do gift-giving more efficiently, as long as we are forced to continue doing it.
Yet the advice, ten pages of it, does not go far. Half of it emphasizes the importance of minimizing risk by knowing the recipient’s preferences, and by not spending a lot. The other half considers strategies for charity tie-ins and gift cards. Most of the advice, like the rest of the book, misses the point of Christmas gift-giving.
There is a correct answer to my opening question, one that Waldfogel, at least in his Scrooge character, seems not to have considered. Christmas gift-giving is, at its heart, an excuse for a social occasion. Christmas gift-giving is not so inefficient if one takes into account the subjective value of the social occasion. Scroogenomics does not acknowledge this possibility. And those of us who actually enjoy getting together with people at Christmas will surely take offense at this, and at the book as a whole. Worse, those not trained in economics may not catch the intellectual slight-of-hand by which the bulk of the value of the Christmas celebration is whisked away, and may come away from the book grumbling suspiciously about how economic theory destroys the value of the things that matter most in life.
Again, it is the title that tells you who this book is really for. It is not really for people who grumble about the difficulty of Christmas shopping. The same people would also grumble about the difficulty of reading 146 pages of often dry economic theory. No, this book is for unrepentant Scrooges. It’s for the kind of people who can say, “I hate Christmas,” with such passion that you hope that they don’t happen to be carrying their machine guns on any occasion when they run across Santa Claus. It’s for people like the book’s Tommy, whose response to receiving a gift is, “A friggin’ kaleidoscope? What the heck were you thinking, you old bat? I hate this thing, and I hate you.” If, like Tommy, Christmas makes you fly into a rage, and if you don’t mind reading economic prose that’s more dry and soulless than what you see in The Wall Street Journal every morning, then Scroogenomics provides all the scientific-sounding rationale you need to justify being as angry as you are about such an inefficient holiday.