We have now reached December, the gift-giving peak of the year. Running through our minds are family, Christmas trees, food, and whether or not professors will have that good ole holiday cheer while grading our exams. Here is something else to keep in mind while preparing for the holidays: the economic and environmental impacts of holiday gift-exchanges.
In a controversial, Grinch-esque study done by economist, Joel Waldfogel, author of “Scroogeonomics: Why You Shouldn’t Buy Presents for the Holidays,” 86 undergraduate students were asked whether or not they liked their Christmas gifts. Instead of phrasing it as a yes or no, Waldfogel asked how much the students would have paid for those gifts themselves. The result?
The students estimated that their gifts had cost $438.20 — but they said the most they would have been willing to pay for them was $313.40. From an efficiency standpoint, this means over $100 in wasted spent money. Viewed through an environmental lens, this wasted money translates to wasted materials, manufacturing pollution, travel miles, and more that is not contributing to the gift-receivers satisfaction.
This illustrates the dark side to gift-giving which is that “between a tenth and a third of the value of holiday gifts is destroyed by gift-giving,” (Waldfogel, 1998) translating to a loss of between $4 and $13 billion in a given holiday season.
Everyone loves money, but let’s face it, it doesn’t make the best gift. Because of this, you need to make up the lost value from the gift-giver/receiver mismatch elsewhere which can be done through giving the rarest gifts of all: Sentimental gifts.
An economic concept that everyone can understand is that the rarer something is, the more valuable it is and thus the more value it adds to a present. Handmade sentimental gifts are nearly impossible to receive from anyone other than you. Similarly, handmade gifts will easily lessen the carbon footprint of gift-buying through a store that likely had most of its inventory shipped thousands of miles.
So consider creating or crafting a gift with what you have at home. Homemade peppermint bark, a repurposed painted frame with a picture of you and your mom, or maybe a clever coupon book with ideas for what your cherished-one would love! If handmade gifts aren’t your strong suit, etsy.com is a great way to support small businesses that will often personalize sentimental gifts for you to give.
Another way to prevent this lost value is to buy people what they really want but wouldn’t buy themselves. Although it takes away some of the fun, just ask! This will alleviate the stress of having to pick out an entire gift and also ensure they receive something they want and will value.
Get creative with packaging! Recycle materials or buy wrapping paper made with at least 50% recycled content. I have found that old daily campus newspapers make for an excellent wrapping paper!
That’s all for now, Happy Holidays!
Waldfogel, Joel. Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays. Princeton: Princeton UP, 2009. Print.
Waldfogel, Joel. The Deadweight Loss of Christmas: Reply. New Haven: American Economic Review, 1998. Print.