Gift-giving and deadweight loss

Kristine E. Principe and Joseph G. Eisenhauer

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2009, vol. 38, issue 2, 215-220

Abstract: Although economic theory asserts that cash is often superior to gifts in-kind for maximizing welfare, there has been no empirical consensus on whether in-kind gift-giving destroys or creates value--i.e., whether recipients value gifts less than, as much as, or more than givers pay for them. The present study introduces a simple but important methodological innovation. Whereas prior studies focused exclusively on recipients' estimates of the costs of gifts, we obtain more objective information on actual market prices. We also compare gifts in-kind to gift cards. We find a deadweight loss that averages more than 7 percent of the market price on gifts in-kind, and more than 14 percent on gift cards.

Keywords: Deadweight; loss; Market; failure; Externalities; Christmas; Gift-giving (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6W5H ... c343415b42aa302a702c
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:38:y:2009:i:2:p:215-220

Access Statistics for this article

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Pablo Brañas Garza

More articles in Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) from Elsevier
Bibliographic data for series maintained by Catherine Liu ().