Economics and Christmas

Art Carden has an amusing article up at Forbes titled “Ruining Christmas: An Economist’s Guide.” Here’s a taste:

1. You Shouldn’t Have. No, Really. You Shouldn’t Have. The classic salvo in the literature on the economics of Christmas is Joel Waldfogel’s “The Deadweight Loss of Christmas,” which provides a bit of evidence that people would be happier if you gave them cash instead of an equally-expensive present. Yes, it’s the thought that counts, but how many of us have given (or gotten) gifts that have ended up in an end-of-year Goodwill donation or a Spring yard sale?

We learned this first-hand at a family holiday party that involved a white elephant gift exchange. Everyone went home happy, but one participant (an Alabama fan) opened a box of Auburn stuff, another (an Auburn fan) opened Alabama stuff, and one of the gifts I (an Alabama fan) opened was an LSU cap. Again, everything worked out in the end, but the initial distribution was incredibly inefficient.

Read the whole thing. Carden also wrote the equally amusing “How Economics Saved Christmas.” My review of Waldfogel’s book is here.

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