Looking for the perfect gift? Social science can help
ARE you in a panic, not sure what to get that special someone this year? Fear not, because my fellow social scientists have the answer for you. For economists, the perfect gift is simple: cash. Indeed, they often express surprise that anyone would give anything else. There is even lively economics literature on the "deadweight loss of Christmas". One economist writing in the prestigious American Economic Review estimated this loss at 10-33 per cent - meaning that gifts we buy others are worth up to a third less to them than what they would buy for themselves if we just gave them the money instead.
Imagine the look on the kids' little faces when, instead of putting presents under the tree, you whip out your wallet and give them each a crisp $100 bill. I proposed that once to my wife, and she suggested that we should also start a fund to pay for their counselling.
Perhaps you are fretting that you might get someone a bad gift by mistake. How important is the perfect gift? Sociologists have taken up this question. In a 2008 study in the journal Social Cognition, four sociologists conducted an experiment in which young men and women who had just met gave one another gift certificates. Unbeknown to the participants, the researchers manipulated the gifts, giving half of the recipients popular certificates, and the other half embarrassing ones.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Columns
‘Competition for talent’ a poor excuse to keep key executives’ pay under wraps
OCBC should put its properties into a Reit and distribute the trust’s units to shareholders
Why a stronger US dollar is dangerous
An overstimulated US economy is asking for trouble
Too many property agents? Cap commissions on home sales
Time to study broadening of private market access