The Economics of Wasteful Spending: The Deadweight Loss of Christmas

If you haven’t yet finished buying Christmas gifts for your nieces and nephews and the neighbor across the street, maybe you shouldn’t bother. That’s right, don’t buy them gifts this year — or ever; it’s an economic waste, says University of Minnesota economics professor Joel Waldfogel. 

Twenty years ago, Waldfogel coined the “deadweight loss of Christmas” theory in a small paper in the American Economic Review. His research, popular with the media this time of year, has gone on to have a life of its own. And Waldfogel followed it up with the 2009 book “Scroogenomics: Why You Shouldn’t Buy Gifts for the Holidays.” 

On the NewsHour Monday, Paul Solman explores the meaning and limitations of the deadweight theory with the Scroogenomist himself. For more about the economics of gift-giving and its alternatives, here is the edited and condensed transcript of Paul’s extended conversation with Waldfogel.

DYI Comment: Just click on the title for the full transcript.

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