Deadweight loss of Xmas
Merry Christmas from the Antitrust Hotch Potch with a timely piece on the Deadweight loss of Xmas.
I love economics especially when it achieves disputed and funny conclusions. In that respect, J. Waldfogel’s paper on the Deadweight loss of Christmas is a must-read. The paper, published in the American Economics Review in 1993, reaches the conclusion that Xmas presents are detrimental to general welfare. The underlying idea is that in a gift-giving system, "consumption choices are made by someone other than the final consumer". As Waldfogel explains, "a potentially important microeconomic aspect of gift-giving is that gifts may be mismatched with the recipients’ preferences".I’m sure that Ebay will do its best to make sure that goods travel to those who value them the most in the post Xmas season.
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