Is Cash The Best Christmas Present? Economists Weigh In

An economic research forum in Chicago asked their panel of expert economists to weigh in on the following theory:

“Giving specific presents as holiday gifts is inefficient, because recipients could satisfy their preferences much better with cash.”

Ha! Most of them disagreed (55%, with 22% “uncertain”), but I do love some of their responses:

Gift giving is a form of communication. Comparing the gift to what the recipient would purchase with cash misses the esssence of gifts. — Larry Samuelson, Yale

“generally agree but exposes neoclassical econ limitations bc it excludes utility from gift giver or recipient choosing/receiving a gift” — Michael Greenstone, MIT

“Only an economist could think like this.” — Eric Maskin, Harvard

“Instead of proposing to your wife w/diamond ring, you offer a gift card of equal value. Efficient — if you don’t count your hospital bills.” — Austan Goolsbee, Chicago

Oh, Austan Goolsbee. You do have a point.

I got a Christmas card in the mail yesterday from my dad with a check for $100 in it and while I do love money, especially 100 dollars of it, it made me feel a little weird. Am I too old to take money from my dad? Do I even need money? Doesn’t this make the whole gift-giving thing feel really transactional? Should I tear the check up? Couldn’t he spend some time and try to get me something he thinks I would like, even though I would end up not-liking it and being saddened by the fact that my dad doesn’t really get me and never will?

This is what Christmas is all about people.

I decided to think of it as my dad’s way of hanging onto some fatherly feelings of abundance and magnanimity, also of having no idea what to get me and hating Christmas anyway, so I both cashed the check and decided to not-feel bad about sending him some homemade cookies and a card.

Photo: sh4rp_i

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