The Business Times

Looking for the perfect gift? Social science can help

Published Tue, Dec 22, 2015 · 09:50 PM
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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.

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