Deadweight Loss of Gift-Giving
The gap between what a gift costs the giver and what the recipient values it at.
What it is
In a 1993 survey of undergraduates, Waldfogel estimated that gifts lose between a tenth and a third of their value, with gifts from friends and romantic partners the most efficient and noncash gifts from extended family the least. The author noted that the respondents may not represent the wider population.
In effect
The article on spending more at Christmas uses it as the measured side of the puzzle.
What it does not say
The estimate comes from surveys of undergraduates at one US university, and the author noted that they may not represent the wider population. It measures value in money and leaves out what a gift means to the people who exchange it.
Sources
- Waldfogel, J. (1993). The deadweight loss of Christmas. American Economic Review, 83(5), 1328-1336.