Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

Joel Waldfogel is an economics prof. at Wharton School (UPenn.). His

  1. Jan 24, 2010 #1

    EnumaElish

    User Avatar
    Science Advisor
    Homework Helper

    Joel Waldfogel is an economics prof. at Wharton School (UPenn.). His latest book is Scroogenomics. In it, he estimates that the recipient of a gift usually values the item less than its cost. By his measure, Christmastime gifts amount to $12 billion lost value ("deadweight loss") each year, which is inefficient and irrational.

    Modern economics postulates that the "best" gift is money -- it lets the recipient to spend it as he or she pleases. Prof. Waldfogel's book seems a special case of this general postulate. But writing a jolly check payable to the grandchildren is not a popular choice among the grandparents currently, and unlikely ever to become one.

    What is your take on his claim? Should holiday gifts be discontinued, managed, regulated, banned? Or replaced by handouts in the form of cold cash?
     
  2. jcsd
  3. Jan 26, 2010 #2

    arildno

    User Avatar
    Science Advisor
    Homework Helper
    Gold Member
    Dearly Missed

    Re: Scroogenomics

    Waldvogel might ask a parent of a 5-year old, who has laboured over, and made a nice drawing as a gift to him/her, for a second opinion.
     
  4. Jan 26, 2010 #3

    mheslep

    User Avatar
    Gold Member

    Re: Scroogenomics

    I heard a review of Waldfogel before the holidays and it nudged me into a decision I had been mulling for some time for my family during the holidays: all gifts must be something one makes, not buys, with some reasonable caveats. Ties, scarfs, and the like are banished. The result is that Waldfogel's theory of gift value is, I think, reversed. If the house was on fire, I might run back for my xmas gift family photo collage made by Mrs mheslep while letting a hundred flat screen tv's burn.
     
  5. Jan 26, 2010 #4

    mheslep

    User Avatar
    Gold Member

    Re: Scroogenomics

    Exactly, though I vaguely thought Waldvogel was in the main talking about purchased gifts.
     
  6. Jan 26, 2010 #5

    Evo

    User Avatar

    Staff: Mentor

    Re: Scroogenomics

    I like money, but no amount of money can replace the thoughtful gifts my two girls get for me. They know what I care about and the time and thought they put into getting me something that will be meaningful to me just blows me away. They're not expensive, but each one brings tears to my eyes and each time I walk by one of their gifts, it tugs at my heart.
     
  7. Jan 27, 2010 #6

    Astronuc

    User Avatar

    Staff: Mentor

    Re: Scroogenomics

    It depends on what is behind the gift.

    :approve:

    :approve:

    The most important thing, no amount of money can buy. It must be given freely.
     
  8. Jan 27, 2010 #7

    mheslep

    User Avatar
    Gold Member

    Re: Scroogenomics

    I missed this phrasing the first time. Did you really mean to say "managed, regulated, banned"? Even assuming Waldvogel is 100% correct, why not phrase the question something like "does this make you reconsider holiday gifting" or "knowing this, would you behave differently". Who or what third party entity do you imagine has even the slightest authority or right to "manage, regulate, or ban" holiday gifting?
     
  9. Feb 5, 2010 #8

    EnumaElish

    User Avatar
    Science Advisor
    Homework Helper

    Re: Scroogenomics

    The language you suggest is sensible but I was trying to be ironic.

    I understand that some gifts are managed, regulated, or banned all the time, and all gifts may have to be managed, regulated, or banned sometimes (for example, as a punishment), but all gifts cannot be managed, regulated, or banned all the time.
     
  10. Feb 5, 2010 #9

    mheslep

    User Avatar
    Gold Member

    Re: Scroogenomics

    Yes because the item is perhaps toxic or otherwise presents some kind of harm to the recipient, not ever because some third party believes it is not an efficient use of funds.
     
  11. Mar 11, 2010 #10
    Re: Scroogenomics

    The most efficient purchases are those you make on yourself, because obviously you know exactly what you want. Less efficiently, you can buy something for someone else, or someone else can buy something for you. Least efficiently, someone else can buy something for someone else. This concept is called the "efficiency of purchases" presented by Nobel Prize winning economist Milton Friedman.

    Getting money is the best gift, because obv. if you get money you know exactly what you want, and can get it. Even for sentimental moments, etc. with the money you can buy a family photo, or even a family vacation, or a romantic getaway.

    Food for thought, would anyone honestly prefer a $20 best buy gift card to a $20 bill? If not, then why are you more likely to receive the former as a gift rather than the latter?
     
  12. Mar 13, 2010 #11

    arildno

    User Avatar
    Science Advisor
    Homework Helper
    Gold Member
    Dearly Missed

    Re: Scroogenomics

    WOW!

    I didn't know that there exist persons like you, who have a total knowledge about what pleases you most.
    Furthermore, I didn't know you have such idiotic significant others who never can be better judges than yourself about what you'd really profit from.

    Or is it, perhaps, that you do not have any significant others at all, because you are too full of yourself?
     
  13. Mar 13, 2010 #12
    Re: Scroogenomics

    Cold cash works work me. Most useful present I ever had. I also tend to give cash very often (but not in all situations) and it works out pretty well.

    But holiday gifts should not be "discontinued, managed, regulated, banned". I mean , what gives the society the right to legislate gift regulations ?
     
  14. Mar 13, 2010 #13
    Re: Scroogenomics

    Huh? This psycho-babble you gave me is a waste of time.

    I'll just quote from the text of http://en.wikipedia.org/wiki/Milton_friedman" [Broken] (winner of the Nobel prize in econ.) Free to Choose complete with the explanation, and I'll follow up with an example.



    He then goes on to speak to us about welfare.

    Here is an example. Jay Leno went to Michigan (very poor by American standards), and gave some workers free comedy tickets. He then was so upset that the workers put them up on eBay, that he http://www.techdirt.com/articles/20090318/0134084161.shtml" ordered eBay to ban the sales. This is in Category II. Apparently he thought that the worker's would rather see his show than get some food.

    Bear in mind when discussing economics that in economics we are talking about getting the most for a dollar, yen, etc.
     
    Last edited by a moderator: May 4, 2017
  15. Mar 13, 2010 #14

    arildno

    User Avatar
    Science Advisor
    Homework Helper
    Gold Member
    Dearly Missed

    Re: Scroogenomics

    Actually, you are the one psycho-babbling, because you totally ignore highly important factors.

    For example, I don't know about all books that exist that I would enjoy if I got them.

    Having friends&family who DO know what sort of books I like multiplies my chances manifold of getting books I will like if they give THE BOOKS to me, rather than giving me cash so that I myself have to go looking for them at random.

    Giving me "useful tips" about books along with the cash is still not good enough, because I must go and buy them, instead of geting them in my hand right now.
     
  16. Mar 13, 2010 #15
    Re: Scroogenomics

    Isnt simpler to keep an Amazon.com wish list, and buy from there with the cash you got ? This is what I do. I also have a public wish list, so other persons can see what are the books I want (not matter that some would be able to make a pretty good educated guess)
     
  17. Mar 13, 2010 #16

    arildno

    User Avatar
    Science Advisor
    Homework Helper
    Gold Member
    Dearly Missed

    Re: Scroogenomics

    What about those books I'd love to read, but have no idea that I would want to read before being given them?

    That's where knowledgeable friends and family can extend my eventual possessions.


    Similarly, you go to a picturesque antique shop on your holidays, finding a bracelet you KNOW your mother would love.

    What do you do?
    Wait till you are back, hand her the cash and the ticket to wherever you had vacation, saying she sjould go and buy that bracelet?

    Wouldn't it be much simpler to buy the bracelet and hand it over to her yourself?
     
  18. Mar 13, 2010 #17

    turbo

    User Avatar
    Gold Member

    Re: Scroogenomics

    My wife and I cook for others. Regardless of monetary value, people appreciate the effort and thoughtfulness behind the gifts. I would feel crass, just handing out money, and would be quite uncomfortable about giving gifts without putting a lot of thought and effort into the selection.

    Today, my wife got into a baking mood, and while I did some spring-time clean-up she made soft German sugar cookies filled with lemon curd, a couple of round loaves of substantial pumpernickel bread, and 4 different kinds of bone-shaped dog cookies. Most featured rolled outs, whole grains, and garlic powder, and were built around main ingredients such as fresh herbs, ground beef, and fresh beef liver. Some of those cookies smelled REAL good when they were baking, so I'm going to have to sample them when giving Duke treats. I stopped in at the neighbors' this afternoon and dropped off a loaf of the bread, a bag of the filled cookies, and another bag of mixed dog-treats for Max. Max did NOT undervalue his gift. He got to sample a garlic and parsley cookie first, and he was kind of clingy afterward (more!). I think gifts are more fun to give when they are unexpected and not tied to some event.
     
  19. Mar 13, 2010 #18
    Re: Scroogenomics

    A lot of ppl would be just happy to receive money as a gift. So why would you feel crass ? A large percentage of gifts are always returned if you let the receipt in the packet. Especially some pretty expensive ones, when temptation to have the cash is big.
     
  20. Mar 13, 2010 #19

    turbo

    User Avatar
    Gold Member

    Re: Scroogenomics

    Let's put it this way - one of my neighbors's grand-daughters has a birthday coming up on the 20th. She'll be 5. She loves rocks, animals of all kinds, and astronomy (among other things). My wife is going to cook treats for her birthday party, and she has already bought her a big bag of assorted sea-shells, and a bag of mixed polished agates with a wide range of colors. She'll love those. Would she love a check? Don't think so.

    My father is 84. He is not wealthy, but he has everything he needs. Should I write him a check on his birthday or father's day? Generally, my wife and I fix him up a multi-course meal that lends itself well to left-overs. Maybe pork rib roast with gravy, mashed potatoes with onions and garlic, sweet peas with pearl onions, pastry biscuits, rye bread, and vegetables that are compatible sides. He'll call over and over again as he demolishes that feast. Think he'd like a check?
     
    Last edited: Mar 13, 2010
  21. Mar 13, 2010 #20

    epenguin

    User Avatar
    Homework Helper
    Gold Member

    Re: Scroogenomics

    Gifts? Bah, humbug! scrooge.gif
     
Know someone interested in this topic? Share this thread via Reddit, Google+, Twitter, or Facebook




Similar Discussions: Joel Waldfogel is an economics prof. at Wharton School (UPenn.). His
  1. Economics ? (Replies: 20)

Loading...