Fruitcake science

Ho-ho-ho! Study finds presents no ‘economic’ waste

YULE like this news, coming as it does so close to Christmas.

The National Center for Policy Analysis, a think tank that apparently hasn’t enough to do, has debunked the notion that gift giving is a waste of economic resources.

OK, maybe you didn’t know that Christmas gifts were under attack. Well, now you do.

Birthday presents were under attack, too, as were Easter baskets and Hanukkah gifts. Critics contend that in economic terms, they are all “deadweight losses” when you take into account that most recipients do not get something they want or need.

That argument goes back to an economist named Joel “Just Call Me Scrooge” Waldfo

gel, who wrote in a 1993 American Economic Review article that “between 10 and 33 percent of the value of holiday gifts is destroyed by gift giving.”

Here’s the gist of Scrooge Waldfogel’s argument: “While it is possible for a giver to choose a gift which the recipient ultimately values above its price … it is more likely that the gift will leave the recipient worse off than if she had made her own consumption choice with an equal amount of cash.”

Let’s forget the fact that Waldfogel uses “she” in that sentence — which implies, at least to me, that it’s a guy making a bad decision when buying a gift for a woman.

True, men probably do buy stupid presents more often than not because we take about three seconds thinking about things like this. But let’s assume that Waldfogel is also targeting women.

Anyway, let me put words into Scrooge Waldfogel’s mouth: “Do like Italians do at weddings and hand over a cash or checkstuffed envelope instead of an actual, inthebox gift. The receiver will appreciate it more.” Too tacky? Try a gift card. But Waldfogel’s piece was written more than two decades ago. Surely, nobody would accept such a spiritless argument in this day and age.

Well, somebody did. Just last year, New York Times columnist Josh Barro apparently couldn’t leave well enough alone and took up Scrooge Waldfogel’s cause.

And that got the National Center for Policy Analysis in motion with its hotoffthepresses holiday report that began thusly: “New York Times columnist Josh Barro took obvious pleasure last Christmas reporting on one of modern economics’ most settled arguments: that inkind gift giving, especially at Christmas, involves a lot of waste.” The Center’s Richard B.

McKenzie donned his Santa suit and counter-argued that Waldfogel’s 1993 study was flawed, not only because it only surveyed undergraduate Yale students but also because it contained lots of estimates and guesstimates.

“Yes, people often buy wrong gifts,” wrote McKenzie. “Gift mistakes can be nothing more than an economic and personal problem to be mitigated.” If you do buy what McKenzie calls a “failed gift,” you learn something and thus won’t give a dud the next year.

I know you are dying to know my opinion on this very divisive topic. But, in the holiday spirit, I’m going to — let’s say — pass the buck. And usually I pass it in an envelope that says, “Merry Christmas. I didn’t feel like going to the mall this year.

But there’s hope if you’re a “failed gift” recipient.

American Express Spending & Saving Tracker says 76 percent of Americans find regifting acceptable.

And last year, 54 percent of Americans expected to get”rid of their dud gifts by giving them to someone; 48 percent said they actually regifted something.

Kitchenware was the most regifted item. (Who doesn’t like getting someone else’s toaster?)