The Deadweight Loss of Diwali: A Developing Country Perspective on Economics of Gift Giving

Parag Waknis and Ajit Gaikwad ()
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Ajit Gaikwad: Manghanmal Udharam College of Commerce

Economics Bulletin, 2017, vol. 37, issue 1, 530-538

Abstract: Using survey responses of undergraduate students from a college in India, we conducted an empirical analysis of efficiency of non-monetary gifts exchanged on the occasion of Diwali similar to analysis for Christmas in Waldfogel (1993). We found an average deadweight loss of 15% on all gifts, with gifts of accessories and electronic goods showing a lower loss compared to other types of gifts. We also found that lesser the generational distance between the person gifting and the receiver, lower is the deadweight loss. In addition, there is weak evidence supporting differences in valuation of gifts based on closeness of familial ties as understood in this cultural context. We, however, did not find any systematic difference in valuation of gifts by gender of the recipients.

Keywords: consumer behavior; deadweight loss; efficiency; non-monetary gifts. (search for similar items in EconPapers)
JEL-codes: D1 Z1 (search for similar items in EconPapers)
Date: 2017-03-20
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Citations: View citations in EconPapers (1)

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