Gifts and guilt

In a now famous 1993 paper the economist Joel Waldfogel attempted to calculate the economic deadweight-loss caused by giving Christmas presents. His argument was that money spent by a gift-giver on a present would usually have been better spent by the recipient, since the recipient would have a better idea of his own needs and preferences than the person choosing the present.

Waldfogel’s most generous estimate rated the ‘efficiency’ of a Christmas present no higher than 90 per cent — so the typical gift was about 90 per cent as valuable as if you had given someone an equivalent amount in cash and allowed him to spend it on himself. He calculated that every year in the United States alone billions of dollars of value were squandered through the exchange of presents.

This is of course a rather narrow and uncharitable view. It neglects symbolic value: presents convey affection through a deliberately sacrificial act of generosity. It has been suggested that the reason jewellery and flowers are so valued by women when given to them by men is precisely because men aren’t interested in flowers or jewellery. Hence when you give flowers to your wife, you have spent money on something which does nothing for you but which makes her deliriously happy: it is unambiguously a present. By contrast, if you buy your wife a quad-bike or a radio-controlled helicopter for Christmas, the fact that you yourself may benefit from the purchase raises the suspicion of self-interest. Lingerie perhaps belongs in this more ambiguous category, as does a vacuum cleaner or, worst of all, an ironing board.

There are other psychological factors at work. The cost of an item we buy for ourselves lies not only in the financial outlay but also in the emotional cost.