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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10 Comments / Post A Comment

dotcommie (#662)

I mean that statement is true from a classical, neoliberal economics perspective. But classical, neoliberal economics is frequently wrong :)

aetataureate (#1,310)

If the person giving you a gift genuinely doesn’t know you or what you like, then the gift IS transactional.

Olivia2.0 (#260)

I feel SO BAD spending money given to me as a gift on…myself. My paycheck? I have no guilt blowing entirely on myself (or – whatever remainder is left after rent/etc.). But money gifted to me, I feel like I should “use it wisely” and always put it towards bills. So…in my case, cash would be more “useful” – but in my family the holidays aren’t necessarily about being “useful”. Anyone else feel this way?

LookUponMyWorks (#2,616)

@Olivia2.0 I get what you’re saying. I also feel increased pressure to get something “amazing” with any gift cards gifted to me, even if they’re, like, $5 to JC Penney.

Panamanda (#2,713)

@Olivia2.0 I’m actually the opposite. I can always find something that I “should” be spending my paycheck on, whereas I view money gifted to me as an excuse to buy something more fun. It’s easier for me to justify being frivolous with the unexpected gift money.

j a y (#3,935)

When I was a kid and has no income or access to money, I really treasured monetary gifts because it gave me independence that was hard to come by!

But nowadays I can earn my own twenty bucks. And I can buy my own knickknacks! So really, unless inspiration strikes and you discover something you think would change my life, I’d rather just appreciate the company. Also you don’t have to buy me the life changing object… You could just tell me about it!

WayDownSouth (#3,431)

@j a y yes, I absolutely agree with this. If I want something, I can buy it. Spending time with someone is much more precious than receiving a gift from that person.

garli (#4,150)

The best gift you can give to anyone is a mutual agreement to not exchange gifts.

Some gift givers- like my brother- manage to find things that are awesome and that I never would have stumbled on myself. If he just gave me the cash, I would not have both the delight of the object and the delight of the surprise. However, I am a so-so gift giver, and people might prefer to get money from me :(

notpollyanna (#2,841)

I tend to fill my Christmas wish list, which my mother demands by Halloween, with things I am going to buy myself anyway. I am currently doing a bookbinding diploma, so it is full of bookbinding tools, equipment, and supplies that I need, but haven’t bought yet. Still has the element of surprise, guaranteed to be something I want, has the full utility of giving me money.

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