Tuesday, December 13, 2016

Christmas Gift-Giving

Written by: Gopal Sreedharan
Christmas Gift-Giving
“It’s the most wonderful time of the year.” Christmas is around the corner: the biggest time of the year for economies. Families fly all over to see each other and buy presents. In 2013 the United States retail industry made over three trillion dollars during the holidays. Those sales were 19.2 percent of the retail industry's total sales that year. Due to the immense rush during holidays, just over 768 thousand employees for hired during time to compensate for the rush.
Other than money for the retailers, gift giving is also great, because it shows care and love for all of your friends and family. There’s just one problem with the process of gift giving. The deadweight loss aspect of it.
There’s no problem with giving present when the recipient loves and uses the gift fully, however this does not happen a lot of the time. The gifts are a loss to the giver and not necessarily a gain for the recipient. That’s the deadweight loss of it.
There are multiple solutions to this problem though. You can still get special gifts for your family and close friends because you know them well enough to get a gift that’s useful for them. For friends that are not as close, there are gifts that never go wrong. Everyone likes money, so you can just gift them money. Some people do view money as a lazy gift in bad nature, so another solution is a gift card. It’s a sleek way of gifting money. If you want to show your love this Christmas, and you don’t know what to get, go with money or giftcards. It never fails and is a win for everyone.

Bender, Joshua. "Topic: U.S. Christmas Season." Www.statista.com. N.p., 16 Dec. 2015. Web. 13 Dec. 2016.

"Meaning of Dream «Gift»." The Meaning of the Dream in Which You Saw «Gift». N.p., n.d. Web. 13 Dec. 2016.

Solman, Paul. "The Economics of Wasteful Spending: The Deadweight Loss of Christmas." PBS. PBS, 23 Dec. 2013. Web. 13 Dec. 2016.

17 comments:

  1. It is kind of surprising that 19.2% of retail sales are done during the holidays, but it is understandable why. Although some may refer to unwanted gifts as deadweight loss, many people would rather give a gift than a gift-card for Christmas, as it means more to them. But, if someone doesn't know someone as much I agree that it is much better to get a gift-card, as it reduces deadweight loss and increases satisfaction of the receiver.

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  2. Although you made some interesting points, I do not agree that giving gifts is a deadweight loss. This is due to the fact that even if the person doesn’t necessarily like the gift, it doesn’t mean it was pointless in being given. Another point I disagree with is that gift cards are the way to go, because like you said with other possibilities, there’s still a chance that the person will not like the location that the gift card is for. In all honesty though, most people are happy with receiving anything, therefore eliminating the deadweight loss that you mentioned.

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  3. I wouldn't necessarily consider giving someone a gift they don't want deadweight loss, but I can relate on a personal level, and understand the frustration of getting a gift I know I won't use. I am also curious to see statistics that are more updated as to the year we're currently in. For example, maybe the US retail industry made more than three trillion dollars over the holiday, maybe they made less, but I would show the trend.

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  4. I'd like to know more about why you think there is a deadweight loss to giving gifts, maybe with some statistics or evidence, but otherwise I found your topic interesting because I've never thought about the economics of gift-giving. I could see how deadweight loss has to do with buying and giving people gifts; most of the time people don't get what they want or they get the wrong size, color, design, etc., so they have to exchange it, or acquaintances get each other gifts that the other doesn't particularly like or already has another one of. These gifts that don't benefit the user and definitely do not benefit the giver because they are not keeping the gift can be seen as deadweight loss because they are almost useless in the point that they now have to be returned and the receiver of the gift has to pick out something new, and it just takes a lot more time than just keeping a gift.

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  5. I was fairly surprised that the Christmas season was only around 20% of the annual revenue, as the season is a month and a half, or around 10% of the year, and people buy all their goods this time of year. I would have expected that to be around 30% of the annual total, as people actively look for extra things to buy for others which they usually would not.

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  6. What you are talking about can be construed as more of an implicit discussion than an explicit one. This is not a problem, I loved the way you discuss dead weight loss in terms of the emotions people have for them. I can back this up quite easily, I have received many gifts that are given to me as that the giver doesn't want to part with, and I didn't like them either. But I think your argument could be better if you did incorporate the explicit aspect of these gifts.

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  7. Personally Gopal no hate towards you but I don't agree that some Christmas gifts are dead weight or lazy. There are children all around the world who don't receive gifts at all because of were they are brought up. Christmas is all about giving and personally I love the feeling when I get a gift whether I like it or not. To me receiving money is awesome, because I can hold on to it and it can be useful for every day spending purchases for the next few months. I view money as a strategic gift to getting teenagers to like you. Receiving the awesome new pairs of shoes you wanted or the new electronic system is sweet, but receiving small gifts like socks or clothing followed by are hug aren't dead weight to me and actually as just as special as every other gift.

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  8. Even if you don't like a gift you receive during Christmastime, a lot of time you can exchange it for store credit or money, so I'm not sure I would consider these gifts deadweight loss. However, you could argue, on some level, that actually returning and refunding the gift is a loss of time that wouldn't have occurred if you had been gifted cash or gift cards. Overall, I like that more thought and effort go into gifts other than money, but since you are focusing more on the economics of gift-giving, it makes sense why this wasn't a primary focus in your article.

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  9. I never thought of gift giving as a deadweight loss. When looking at this from an economics point of view, your case makes sense since it is inefficient. However, when people do give gifts, especially for occasions like Christmas, they want it to mean something. Most people don’t usually buy presents for people they don’t really know since they don’t mean as much to them. So, I would think that some of these cases wouldn’t occur in real life. If it were me, I would only buy presents for people I really care about and since I know them all well, the presents I buy them wouldn’t be categorized under deadweight loss. But if someone were to buy it for people they don’t really know, for example a secret santa, time and money could be wasted. By giving gift cards they are more efficient, but I think the aspect of meaningfulness is lost. And since the holidays are a time for people to show love, I don’t think inefficiency is that important or has much of an impact.

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  10. This comment has been removed by the author.

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  11. Christmas Gifts are always awesome! and this is the only time we all can get the most gifts in the year. Well, I feel like the deadweight loss would not go with our friends and family but actually goes to the firms who run the stores because as you said, a person might not like the gift from the giver, so he might go back to the store to return the gift for another one. The returned product will be put back into the store since most of the consumers don't like, at that situation the firms who own the product will face the deadweight loss because he/she can't sell the product when all consumers are not interested. I accept the fact that we all should try our best to buy gifts that are useful and gives satisfaction to our friends and family, but most of the time, we really don't because we all have busy schedules where we try our best to make our relatives happy. The best part would be getting at least one present during Christmas, the gift may not be big and exiting, it could be small and I am sure everyone will be happy with a small gift. Overall, it was really interesting on how US made three trillion dollars in 2013. I guess it is going to grow more!

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  12. Most people take the holidays for their close friends and loved ones rather than random people they talk to weekly. Gift cards and money are like you said, lazy gifts, (even though its extremely nice) but it is always the thought that counts. I wouldn't say it's a dead loss considering if you're buying gifts for your friends and family for Christmas, or in general, you should know them enough to think of at least one thing they would enjoy because overall it's the thought that counts.

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  13. While there is financial loss of gift giving when the recipient is not happy with the gift, there is not as much loss when total utility is considered. Many people are happy just to receive the gift because "it's the thought that counts." Whether or not this is true, making people feel happy and remembered during the holidays does create utility for the gift-giver. Meaningful gifts, when done well are worth more, and can worth beyond the monetary value of the gift.

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  14. I was surprised to find out that in 2013 19.5% of the retail industry's total sales was spent on Christmas presents. A solution to unwanted gifts is that the giver can keep the receipt and give it along with the gift. If the person is unhappy with the gift then they can return it for the money. This can solve the unhappy receiver problem/worry during the holidays.

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  15. One thing is disagree with in this article is giving money instead of gifts. Although gifts cause deadweight lost, it socially acceptable to give gift during Christmas time to share. It is suppose to be the thought of giving the gift that counts the most, not what you can get with the cash.

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  16. It doesn't surprise me at all that 19.2% of company's sales are done during the holiday season. The reason that I think that is because of the advertising all the different companies do during the holiday season. The amount of TV-ads that I see during the month of December is outrageous, as each different company is advertising their "holiday sales". It's kind of crazy to think that since 19.2% of sales are done in December, that means that 80.8% of sales are done in the other 11 months of the year. I know, I'm like a calculator. That's still pretty crazy to think about.

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