Christmas the economist’s least favourite time of year. Yes, there is a lot of consumption spending. But so much of it happens without knowing if the person wants the thing in question!
The inefficiency is enough to make an economist choke on their eggnog.
The Australian economy is a highly efficient machine. It spends 11 months of the year matching consumer goods to the people that value them most. That’s the whole point. In December, however, we throw that principle out the window and enter a frenzy of secretly buying things for people who won’t want them.
We’ve all been victims of the disappointing gift. A duplicate copy of a book. A shirt in the wrong size. An ornament you will feel guilty for never putting on display. Soap.
Some of the worst gifts are well-intentioned. But because you’re not there to say “I already have one of those” or “I’m a size 40”, they turn into a waste. Sending someone else to buy for you creates a problem. They lack the information to make a good choice.
Christmas gift-giving as practised is economically insane — a cultural phenomenon that gives waste and inefficiency pride of place in the busiest time for our consumer economy.
We can try to bring back a bit of efficiency by re-gifting, or by selling things on Gumtree, but it’s not considered very polite.
Luckily, there’s an answer. We can save Christmas.
A few years ago, researchers from Harvard University and Stanford University set out to find out how much people like gifts.
You might have expected people to rate gifts more highly if the buyer worked hard to figure out what they wanted, and if the gift was surprising. Nope. What makes people happy is getting what they asked for.
The problem is that even though we’ve all noticed how much we enjoy getting what we wanted, when it comes to buy, we think the opposite!
If we get a request for a certain gift but decide to buy our own idea instead, we imagine the recipient will think we are extra thoughtful, that we put a lot of time into considering what they might like. In reality, we are perceived as less thoughtful, because it appears we were not listening.
Here’s the researchers — Francesca Gino and Francis Flynn — explaining how it works: “In gift exchange, gift givers may fail to pay close attention to what a gift recipient directly requests. Instead, they may believe that purchasing an unrequested item will signal a sincere concern for the recipient because of the effort they have made to identify a seemingly appropriate gift, thus rendering the gift more personal and thoughtful. Yet gift recipients may be frustrated when givers do not take note of their explicit suggestions.”
Never give people options. This is what the researchers found.
When facing a list of possible presents, such as an online wishlist or bridal registry, most gift-buyers thought buying something else would make people just as happy, or even more happy.
There was one exception — when the recipient was very, very specific. This is why you should avoid giving your gift buyers options.
When a gift recipient mentioned just one specific thing they wanted, the gift giver tended to finally get the message. They realised that buying something else would be a bad idea.
So if you know someone is buying you a gift this Christmas and they ask you what you’d prefer, tell them. The trick here is to not create confusion — keep it simple. Ask for the specific item you’re after.
Ultimately this whole experiment reveals that we tend, even when buying gifts, to focus on our own preferences. We tend to be a bit selfish — buying something we think they will like. It can be very hard to truly adopt other people’s point of view. Admitting that, and actually trying to get the person something they would really, really like, won’t just please the economists. It will bring us closer to the true spirit of what Christmas is meant to be about.