It’s early December, so my annual nervous breakdown over shopping for friends and family is right on schedule.
What to buy? How about gift cards for everyone? Practical, but rather impersonal. That pretty much sums up my personality.
How about jewelry for my wife? Personal? Yes. Practical? Hardly. Really, aren’t 6,485 pairs of earrings enough?
Here’s an idea. How about nothing? Now, before you pass judgment there is actually some sound financial science behind this idea put forward recently by Joel Waldfogel, author of Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays.
Waldfogel isn’t some Grinch dumping lumps of coal into stockings, he is an economic guru as the chair of business and public policy at the University of Pennsylvania’s Wharton School. In a recent Time Magazine interview, Waldfogel says he objects to holiday spending because “it doesn’t result in very much satisfaction.” Really? I still remember the electric football set I got when I was 8 years old. Of course, I can’t really remember any present since, so maybe Waldfogel is right.
Waldfogel elaborates further that, “Normally if I spend $50 on myself, I’ll only buy something if it’s worth at least $50 to me. But if you buy something for me, and you spend $50, since you don’t know what I like, and you don’t know what I have, you may buy something I wouldn’t pay anything for. And so you could turn the real resources required to make things into something of no value to me. And that would destroy value.” Hmm, I wonder if that logic will work on my wife and kids?
Waldfogel does promote gifts cards, gift certificates and giving to charities as practical alternatives for the holiday season. One gift Waldfogel probably wouldn’t mind people giving each other is a copy of his book.
In honor of Scrooge, I’ll wait for the paperback version.
— Ron Neal, email@example.com