Editorial: Holiday gifts economically unsound, but …

By Staff Editorial

All right students, just one week left before we can make our great escape home for the… All right students, just one week left before we can make our great escape home for the holidays. But after a drudging, sleepless week of test taking, all-night study sessions and copious caffeine consumption, some of us will head home with another formidable, unfinished task: holiday shopping.

By this age, we’ve grown up — in some ways at least. Gone are the days when a homemade, construction paper holiday card signed with a few XOXOs would pass for a real gift for your folks. And a little something for your friends back home is always a nice gesture.

But you might want to think twice before you partake on that holiday shopping spree. Any gift you buy that you might have paid too much for in the eyes of the gift-bearer, after considering the economic principles behind it all, might have technically been better left unpurchased. Leave it to the cold, merciless eye of economics to stifle the holiday cheer and age-old tradition — but, according to an article from Slate, there’s a point to be made.

Let’s consider Ralphie and his dear old granny. Granny buys Ralphie an ugly holiday sweater as a gift for the holidays that costs $50. Ralphie begrudgingly accepts said ugly holiday sweater. But Ralphie would have spent only $30 at most on this sweater — you know, just so he’d have something fresh to wear to that ugly sweater party. Dollar per dollar, Granny’s gift cost more than the satisfaction Ralphie received from this gift. Since he would have theoretically only paid $30, that $20 was essentially wasted, the article argues.

Now who’s to say Granny isn’t an old widowed millionaire who didn’t even check the price tag? Also, it’s difficult to put a price on the joy Granny receives in clothing her grandson in the height of fashion. Looking at the hard numbers though, it’s tough to disagree.

December is the time of the year retail sales skyrocket. December will account for 23 percent of the year’s sales at jewelry stores, 16 percent at department stores and 15 percent at electronics stores — a holiday for the retailers.

All of this spending is good for the economy, in a sense. Again, it’s a heyday for the retailers and producers, and money will again flow through the economy. And given our still troubled economic picture, we could use the boost. But considering gift giving’s all-too-often inability to maximize satisfaction for the ultimate consumers, we’re better off leaving those ugly sweaters on the shelves. That, or settle for the cop-out, yet economically sound, gift: cash.

So when it comes time to join the roves of last-minute holiday shoppers depleting store shelves like there’s a nuclear fallout, make sure your mom, uncle, friend or whomever really wants whatever’s wrapped.

Still, unless you want to be ostracized at your annual family Christmas party, you better show up bearing gifts. And if your gifts aren’t a hit, well, thanks for being a good capitalist.