Saturday, December 17, 2011

Gift Giving Emotions and Economics

Twas the week before Christmas and much left to do!   My daughter and I were driving together today and she was having a hard time figuring out a gift for a special friend.  I too struggle with picking gifts for those close to me.  (I always remember one Christmas when JB and I were dating.  He said he did not know what to get me, so "how about a couple of shares of IBM"?) 
As an economics major, she told me that people often underestimate the value of a Christmas gift they have been given.  Barely an hour later, I picked up the Review section of this weekend's Wall Street Journal and there it was -- a headline screaming "Is it Irrational to Give Holiday Gifts?" 
Dan Arkiely draws a distinction between the rational school and the behavioral school of economics.  It is the rational school that my daughter was relating to me, and a particular study that concluded "as much as a third of the money spent on Christmas is wasted, because recipients assign a value lower than the retail price to the gifts they receive."   
Bah-humbug. 
But the behavioral economists know that it's not just about the dollars and cents/sense.  We want to show our love, express appreciation and thanks, make an impression and give something of value.  It's a tall order and I know that the things I pick out may fall short of those lofty goals.
More and more, I have begun to realize that the only thing of true value that can be given to those I care about is the gift of time and attention -- a shared meal, a trip, a concert, a memory of some kind.  And the thing I love most about the holidays is the opportunity to be with them.   
Years ago, JB and I were cleaning out the home of his aunt who in the last years of her life had to be in a nursing home.  She had been a public school teacher for over 40 years.   There were drawers full of Christmas 'teacher gifts' -- scarves, hats, gloves, Avon collectibles, candles.    The job of downsizing other people's stuff is one that I have done a few times now.  It's not fun and it's not pretty.
In reality, there is not much and I and those closest to me really need.  That said, who wants to have nothing to open on Christmas morning? 

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