Holiday gift-giving - is there a deadweight loss or a welfare gain?

Zeev Shtudiner

No 8711256, Proceedings of International Academic Conferences from International Institute of Social and Economic Sciences

Abstract: For macro-economists, the importance of holiday gift-giving is the effect of spending on the macro economy. However, for micro-economists, gift-giving has a different important aspect. The choices of purchasing are made by someone other than the recipient, the final consumer. Recipients sometimes receive gifts they do not like because the giver does not really know with any degree of accuracy the recipients' preferences. Such gifts are welfare reducing (deadweight loss) compared to giving cash. The cost of the gift is higher than its value to the recipient. In this study, we examine whether purchasing holiday gifts in Israel leads to welfare gains or deadweight losses. We also explored how the relationship type (family, social, workplace) affects the difference between the costs and values of gifts.

Keywords: Deadweight loss; Gift giving; Market failure (search for similar items in EconPapers)
JEL-codes: A13 D12 Z13 (search for similar items in EconPapers)
Pages: 1 page
Date: 2019-07
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Published in Proceedings of the Proceedings of the 48th International Academic Conference, Copenhagen, Jul 2019, pages 134-134

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Persistent link: https://EconPapers.repec.org/RePEc:sek:iacpro:8711256

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