Scrooge is an economist

and his name is Joel Waldfogel. Who is Scrooge? He is someone who hates Christmas and thinks that Christmas activities are a waste. Joel Waldfogel in his new book, Scroogenomics (will the onomics trend know no end?) tell us in a series of essays why you shouldn’t buy presents for the holidays. Actually, he does better than that, he calculates it. It is around $12 billion per year made up of the money value of the total difference between what a gift is worth to someone versus just having the money. And that is not counting the whole hassle of the fruitless exercise of trying to make that value less by shopping and making the thoughts that count.

Scroogeonomics is an aptly titled 170 odd page presentation of the case against Christmas but more generally against gift giving. (Note to self: don’t invite Joel to birthday parties). That said, it is completely compelling. You just can’t read this book without thinking about how to get out of the whole gift giving mess. And the book doesn’t even mention the classic Seinfeld episode about bringing stuff to dinner parties. So Joel is like George Castanza too.

But the book is not without hope. We can end the inefficiency yet preserve the ‘social’ value of gift giving. One way is to use gift cards or money rather than trying the ‘thought’ approach. Another is to give to charities in someone’s name although that is still kind of complex as you can get that wrong too. One thing you should not do is do what I have said and encourage self-made gifts. That seems to only exacerbate the inefficiency.

And what of the book itself. It is published by Princeton University Press but if you excepting the usual academic sized affair that is not to be. Instead it is ‘made for gifts.’ A small little book that you might see as a last minute counter purchase at a Borders. In other words, Waldfogel is capitalising on the problem and potentially creating more inefficiency.

So let me help get out of this. Don’t buy this book as a Christmas gift. Go out and buy it now and send it to one friend and ask them to read it and pass it on. That would be efficiency enhancing by the book’s own metric. By the time we get to December, enough may have read it to have killed Christmas for good.

2 thoughts on “Scrooge is an economist”

  1. I once saw a TV show where the host showed how to cook a tasty meal using a dishwasher.
    Using economics to explain Christmas is the same kind of thing — it’s possible, it’s entertaining to watch, but not really a good idea.
    Like a dishwasher, the economist’s toolkit makes things harder than they need to be and does an inferior job.


  2. Dilbert explained gift cards and vouchers.
    -It’s like money, but not as good because it can only be used in one store. It shows thought, defective thought.


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