ONLY an economist would consider to examine whether Christmas is efficient. In 1993 Joel Waldfogel,then a professor at Yale University, turned a lunchtime conversation with colleagues into a paper entitled “The deadweight loss of Christmas”, and which argued that,no, it is not. That gift-giving might actually be sinful is the kind of opinion which breeds a deep mistrust of economists—loathing is perhaps too strong—among those not schooled in the dismal science. It is also just the sort of analytical insight on which economists pride themselves: counterintuitive, or irreverent and interesting. But they should perhaps be less pleased with themselves. The way they consider approximately the most festive time of the year reveals something significant approximately the shortcomings of the field’s approach to human behaviour.
Mr Waldfogel’s notion was a clever one. Massive amounts of money are spent on holiday presents; it makes sense to examine whether such spending leaves the world better off. In buying gifts,people do their best...
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Source: economist.com