Yuletide Economics 101
While they waited in line this morning, I wonder if any Black Friday shoppers read George Will’s op-ed, “The Gift of Not Giving,” in the Washington Post. He explains that holiday-related shopping activities destroy wealth and aggregate utility.
Gifts that people buy for other people are usually poorly matched to the recipients’ preferences. What the recipients would willingly pay for the gifts is usually less than the givers paid. The measure of the inefficiency of allocating value by gift-giving is the difference between the yield of satisfaction per dollar spent on gifts and the yield per dollar spent on the recipients’ own purchases. […]
Were it not for sentimentality about sentiments, which are highly overrated, we would behave rationally, giving cash, thereby avoiding value subtraction.
For our Easter baskets, beginning a couple of years ago, my sisters and I convinced our parents to give us cash instead of candy. Our reasoning wasn’t as well-worded as Will’s, but the principle was the same. If we really wanted candy, we could use the money to buy it. Mom and Dad agreed because it saves them a trip to the store. Plus, they’re not wasting money on plastic eggs and baskets every year. Cash is better because it doesn’t expire, unlike candy and gift cards. The Harbin family destroys no wealth on Easter.