Assuming you shop, that is. Why would you shop when you know that cash transfers are always preferred?
Or are they?
Yes, it’s time once again for me to re-post a post that I worked on pretty hard once upon a time, but now just mail it in.
And away we go:
It’s that time of year where we bid you Happy Holidays from the Economics profession.
Up first, we have a truly heroic figure, Joel Waldfogel, author of Scroogeonomics.* I don’t know your preferences as well as you do, so whatever I give you is probably sub-optimal, unless you tell me exactly what you want. And even then, wouldn’t you rather just have the cash anyway? For those of you who are intermediate micro students, you know that the kids (a.k.a., utility-maximizing agents) always prefer cash over any in-kind equivalent.
Kudos to Professor Waldfogel for willing to be “that guy.”
2013 Update: The median leading economist probably doesn’t believe this.
In this whole world, there is nobody more generous than the miser–the man who could deplete the world’s resources but chooses not to. The only difference between miserliness and philanthropy is that the philanthropist serves a favored few while the miser spreads his largess far and wide.
If you build a house and refuse to buy a house, the rest of the world is one house richer. If you earn a dollar and refuse to spend a dollar, the rest of the world is one dollar richer–because you produced a dollar’s worth of goods and didn’t consume them.
Ah, I just feel all warm and fuzzy inside.
Moving on to The Atlantic, where we have “The Behavioral Economist’s Guide to Buying Presents.” Now this is some truly indispensable advice. Like Waldfogel above, the money point is to just give money. But, for the true romantics who feel compelled to give a gift, the behavioralists recommend this:
Buying for a guy? Get him a gadget. Buying for a girl? Get her something expensive and useless.
The gadget I get.** The expensive and useless? That’s from Geoffrey Miller’s, The Mating Mind. Here’s a brief explanation of courtship:
The wastefulness of courtship is what makes it romantic. The wasteful dancing, the wasteful gift-giving, the wasteful conversation, the wasteful laughter, the wasteful foreplay, the wasteful adventures. From the viewpoint of “survival of the fittest” the waste looks mad and pointless and maladaptive… However, from the viewpoint of fitness indicator theory, this waste is the most efficient and reliable way to discover someone’s fitness. Where you see conspicuous waste in nature, sexual choice has often been at work.
This presents something of a conundrum because “expensive and useless” seems to be at odds with Waldfogel’s hyper-utilitarian cold, hard cash suggestion.
So if you want to hedge your bets, give her Euro!***
* The book is a follow up to the classic, “The Deadweight Loss of Christmas.” Clearly, the book title Scroogonomics can be chalked up to the value-added of the publishing house.
**Conceptually, that is. I generally get ties and socks.
***Okay, that joke was funny back when I wrote it and the Euro was doomed.