After discussing the idiosyncratic way I buy presents (more of which later) with Tom Chivers, he said: “An economist's guide to Christmas would make a good book title”. To which I sent him back a vomit emoji (Tom and I are actually writing a book together that doesn’t actually make me want to vom).
I am a little weary of pop economics advice on how to improve your life. I think
sometimes the advice is a bit of a stretch from what economic models or empirics
tell us.
For example, if I were to write a book like this, I could point to evidence
that finds that we tend to overvalue the gifts we give others. Or perhaps highlight
the fact that people would not pay as much for the gift they are given if were
they to buy it themselves. I would then triumphantly argue we should
just give people money instead.
This is bad economics and bad advice. This reasoning doesn’t take into account the
warm glow you feel from giving the gift or the fact that someone went to the
trouble of buying you a gift makes you happy. After all, isn’t this the reason gifts
exist in the first place?
If you were to take anything from this, it suggests that
giving a gift that is difficult to put a direct value on may be worthwhile – a homemade
gift for example. But it depends on lots of factors which I am sure you already
consider when giving gifts such as… do you think they will like it?
Let's be honest - we have all received gifts that we have
been disappointed with. I remember my Dad once told me about the
time my Grandfather gave him some sort of electronics set for his 18th
birthday. My Dad recalled thinking at the time “does he even know me?”. This is
probably why giving a gift can be so stressful, the thought that the other person
won’t like it and think badly of you.
I think the old saying of “it is the thought that counts” is
extremely important here. If you accept that giving gifts is a good thing and want
it to continue, you also need to accept that people are going to get it wrong
occasionally: it doesn’t necessarily reflect how they feel about you.
So how do I give gifts? Well I really like buying gifts for people. But the way
my wife and I give gifts to each other is as follows: we don’t. Well, strictly speaking,
this isn’t true. If we find something nice that we think the other will like,
we buy it (recently, my wife bought me Dirt, a fantastic book about a journalist
training to be a chef in Lyon and I loved it).
However, we worked out that birthdays, anniversaries, and Christmases amounts
to 3 gifts a year, each. Given our average life expectancies (and marriage expectancy?)
we are looking at well over 200 gifts. Buying one, thoughtful gift for someone
is hard enough. Repeating the process every few months makes it ever more difficult,
so we decided to stop.
We also have an aversion to accumulating physical stuff (despite
my love of kitchen gadgets). So instead of buying each other stuff on special occasions,
we tend to just go to restaurants or visit places to celebrate. But when we do
get each other gifts, we are usually really happy with them and it removes the
stress involved with time constraints of birthdays, etc. It also has the added
bonus of being a surprise!
However, and this is the crucial thing here, I AM NOT ADVISING
YOU TO DO WHAT WE DO. If you enjoy giving and receiving presents with your partner,
or anyone for that matter, continue doing so. If you read this and think you
might like to do the same, great. If not, also great!
In economics, we often model decisions as utility maximisation
(basically, doing what makes you happiest). But what makes you happy is down to
your preferences which are extremely difficult to change. Although it may be
the case that you just don’t know until you try, if you are happiest in what
you are doing, then keep on doing you. Oh and if do want to buy someone a
present for Christmas, buy my book.
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