It is once again that time of year where we bid you Happy Holidays from the Economics profession. Long-time readers may recognize this post from the past three or four year’s worth of iterations, but I guarantee 10% new content per year.
And, away we go!
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.
It is probably noteworthy that the median leading economist probably doesn’t believe this.
Although Berkeley’s Hillary Hoynes is in strong agreement, her colleague Carl Shapiro cries “Balderdash!” Princeton’s Angus Deaton goes so far to say that “This is the sort of narrow view that rightly gives economics bad name.” Harvard’s David Cutler is not sure what to say, but he is sure that he doesn’t “want to be a Scrooge”. (See here for a complete summary, replete with Christmas Cards!).
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. This year I expect shoelaces.
***Okay, that was a solid joke back when I wrote it and the Euro was doomed.