Scroogenomics

Joel Waldfogel, earned a PhD in economics from Stanford University and a BA in economics from Brandeis University. Waldfogel was a professor of economics at Yale University and Department chair at University of Pennsylvania. Waldfogel has accomplished many other things as can be seen in his bio. Waldfogel sounds pretty smart at this point right? If you said yes, then you might be thinking that since he has so much knowledge on the subject of economics that he probably knows good ways to help it. That you should even listen to what he has to say and carry it out to better help the economy. Well lets hope this isn't the case, because Waldfogel has become known for his Scroogenomics, and argues against gift giving. 

Joel Waldfogel in his role from How the Grinch Stole Christmas

Joel Waldfogel is the author of Scroogenomics: Why You Shouldn't Buy Presents for the Holidays. In his book, Waldfogel argues that giving Christmas and Hanukkah presents is bad for the economy. Waldfogel's argument is that people spend a lot of money over the holidays on presents and these gifts make price signals incorrect. Say you buy a sweater for your colleague, it costs $25. You give the sweater to your colleague for Christmas and she says she loves it (but only because she's being polite). Your colleague actually doesn't like the sweater because she doesn't like the color or its not her style. You paid $25 for the sweater and that's what the price signals are going to show, that people like this product and more need to be made. But the person who actually received this sweater doesn't value it at $25; maybe she would value it as $15 or maybe she wouldn't have even bought it at all. In an interview with TIME magazine, Waldfogel says, "We spend in order to produce satisfaction for the buyers. . . If the spending we engage in doesn't produce any satisfaction, then it's hardly a measure of well-being. I'm not against spending. But whatever amount of spending we do, we should get as much satisfaction out of it as we possibly can." Waldfogel suggests that money is a better gift, because people can spend it on gifts they value. 
In this same interview, Waldfogel later explains that there might be a loop hole to this error in gift giving. Waldfogel states, "I'm not against giving gifts in the situations where we have a good idea what people want." This may be a good thing because if I'm understanding him right then he's saying I should only give gifts to people I'm really close to. This is amazing! Next Christmas I'm just going to give gifts to my close friends and family and everyone else I can say, "sorry I'm just listening to Joel Waldfogel and trying to help our economy. No gifts this year."  
Sorry I was hard on you Waldfogel. I see now that you are just trying to help the economy, and hey maybe I should send a copy of your book to my grandma so I can stop getting ugly sweaters every year. So maybe Scroogenomics isn't that bad. Everyone thought Scrooge and the Grinch were bad, but his heart grew 3 sizes that day, as will my wallet next Christmas. 

God bless us, everyone