davejunia.com
Gifts. You’re going to hear, see and hopefully receive lots of them in this coming month. Consumerism has turned Christmas into a frenzy of feasting and gift giving. Not that I am complaining about it. Economists have long struggled with this behaviour. Joel Waldfogel is probably best known for writing ‘The Deadweight Loss of Christmas”. The essence of the problem is that gift giving doesn’t get the recipient what he wants.
What happens here is that the amount spent derives zero benefit and is thus considered a loss to society because the same resources could have been better utilized and allocated to nearly any slightly positive activity. But it is right here that this economic approach has failed to grasp the full extent of reality...
