One economist says that if you must give people gifts for the holidays, cold hard cash is usually best.
“As an economist, I see gift giving as a method of resource allocation that is entirely free of all of the good disciplines that we usually attribute to economic decision-making,” Joel Waldfogel, author of the 2009 book Scroogenomics, explained at Vox.
Typically, Waldfogel says, we buy things for ourselves that are worth more to us (or at least equal) than the dollar figure on the price tag. Christmas gift giving undermines all of that reason, since you have to guess at what people want, and it’s a total leap in the dark as to how much the recipient values whatever you decide on. The gift you get them might cost you $100 but end up being worth nothing to them at all.
A good way around this, he says, is just to give most people money, and let them make the buying decisions for themselves.
“I argued that we are able to choose gifts well only for people we know really well,” Waldfogel writes. “With everyone else, we might be better off giving cash or gift cards.”
Waldfogel may have a hard-nosed attitude toward Christmas, but his own household isn’t entirely mirth free.
“When we were younger, we had no idea our dad felt this way about gifts,” says Hannah Waldfogel, who is interviewed in her dad’s article. “For little kids, you can get them anything. Gift giving is exciting and fun.”