I have had many a talk with myself (and others) about gifts and giving. The things I dislike have to do with economics. It's not that I don't like spending the money. That isn't really it. I'm probably happiest when it is entirely appropriate to simply give a check and be done with it. I like to give people things that they appreciate and need or want and I don't begrudge the money or with to spend it on myself.

It's about the economic value. When you buy something the economic value plummets. This happens even if you buy that thing for yourself. [Ed. note: This is especially true of art. Don't ever let anyone tell you it is an investment.]

When you buy something for someone else, there is an additional factor at work. Not only is the thing immediately worth less but, because you are trying to buy what someone else wants and anticipate the maximum value or your money for their desire, you miss the mark often enough. There is a gap of efficiency that makes the gift immediately worth less than something you'd bought for yourself. If you add to that the fact that you are buying at an arbitrary time (Christmas, birthday) rather than when you encounter an entirely appropriate gift, then the gap widens.

I have long suspected this wrenching gap of waste. A few years ago I tried to atune my friends and relatives to a less, um, timely receiving of gifts so that I could find ones that were somehow better. I have struggled mightily with the whole gifting thing. Even when it is a wedding or something and there is a registry I wonder about it. Did the happy couple just randomly scan stuff that they will now be amazed to see materialized in their home? Will the reality of the green towels that they in fact picked out and you bought from the computer sight unseen contribute to the subtle decline of their happiness?

I am not the only one to see this sad loss of value when money is turned into things, especially things for others. I actually clipped an article from The Economist which addressed this very thing. It is a short but pithy article which you could see online for a hefty fee. It is from the December 22nd 2001 issue of the magazine.

It seems that what is no surprise to us nonprofessionals ("ties go unworn and books unread") has been studied by professionals. Turns out that "even if a gift is enjoyed, it may not be what the recepient would have bought had they spent the money themselves." No kidding.

So, says here, in 1993 Joel Waldfogel, a Yale economist, studied this. His results were not surprising: "on average, a gift was valued by the recepient well below the price paid by the giver." Since few of us would pay what we actually paid for something after trying it out (with exceptions of course) it's completely unsurprising that when we, according to this unattributed article, try to "guess her preferences" we fail even worse than with our own purchases. (Yes, they used the feminine pronoun to modify it and I couldn't figure out whether that was a nod to being PC or else a subtle lack thereof implying that most readers were male and most gift recipients they'd be thinking about therefore female, implying that readers were male and heterosexual. But, I digress.)

My own experience has some real low points in gifting. A red tie for my brother-in-law, that Weight Talker II I spoke about a while ago. (Although the latter turned out to be worth a lot to me when it sadly returned to roost. This is not the only example I have of gifts coming back. Most aren't as happy.)

But the funny thing is this economist studied it. "The most conservative estimate put the average receiver's valuation at 90% of the buying price. The missing 10% is what economists call a deadweight loss." Seems a deadweight loss (I love this term) is "a waste of resources that could be averted without making anyone worse off."

They actually studied the difference in effect based on how close giver and recepient were, the difference in age and such. The article points out that literally billions is being "wasted" annually in gift-giving.

The article ends up on an upbeat note, however. And how could it do otherwise in a free market country's economic mouthpiece in the pre-Christmas issue? Yep, they dig out the pearl that will save the season and let consumers spend their way to prosperity (or is that the poorhouse?). Yep. To quote: "Gift-giving, some economists think, is a process that adds value to an item over and above what it would otherwise be worth to the recipient....Hence a wedding ring is more valuable to its owner that to a jeweller, and the imprint of a child's hand on dried clay is priceless to a loving grandparent." Winding up, they comment that we should choose gifts with high sentimental value. "As economists have studied hard to tell you, it's the thought that counts."

But don't go to the mall to do it. Actually, we were in the mall to look at bedspreads and nightstands for ourselves. I couldn't find anything that pleased me for heaven's sake. Never mind others. I saw piles of special tables of gifts for the holidays. Oh, my. What crap. But, hey, sometimes gifts work. Once someone called my 'Santa Claus' because I found just what she wanted. And my love, FFP? He's getting boxer shorts. Now if he just likes the patterns I pick out.

 

 

 

 

 

.

 

.

Felt OK today. Ate too much late and too little early in the day. Mood all right except for a very strange feeling in the mall like I couldn't breathe!