Friday, December 19, 2008

Dead Weight Loss of Christmas & Future Plans

So today's a Friday, the last Friday before Christmas, come to think of it...I should do some Christmas shopping one of these days. I don't need many gifts, I don't really like the idea of gift giving. This stems from an article I read by Joel Waldfogel, written in 1993. His research suggests that gift givers generally pay more for gifts than the receivers would actually pay themselves, this creates a dead weight loss of money that comes from giving gifts. He suggests gift givers spend significantly more, on average, than the receiver would actually spend if they bought the gift on their own. Waldfogel is now the chair of the Business and Public Policy Department at UPenn's Wharton School of Business, so I'd say he knows his's his position on gift giving from his personal website: 1993, after my first few holiday seasons at the receiving end of uninformed good intentions, I published a little paper in the American Economic Review called “The Deadweight Loss of Christmas.” The point was simple: elementary microeconomics teaches that consumers are better than others at eking the most satisfaction out of their shopping dollars. If this is true, then the sweaters, fruitcakes, and cribbage boards we receive as gifts should produce less satisfaction than cash gifts of equal size, putting aside sentimental value...The result: holiday gift giving destroys about a sixth of the value of gifts, in today’s dollars perhaps $10 billion annually.

Consumer sovereignty, the idea that the consumer is best situated to make his or her own consumption choices, is one of the foundations of many economists’ disdain for government. So if you dislike government because of its damaging effects on allocative efficiency, consistency requires you to have reservations about Santa Claus as well.
He backs this up with a study in 2005 that demonstrated people feel 18% more satisfied with gifts they buy for themselves than gifts they receive, but I don't plan to go into those details here. Basically, this is just another reason why I continue to follow the RandU motto: Deal in straight cash, homey.


On another note I've been meaning to write a lengthy review on the new Guns N Roses album, Chinese Democracy. It's been about 17 years since Guns (well, now really just Axl but that's a story for another day) put out their last album (well, albums, because they released Use Your Illusion I&II as separate albums in 1991 with far too much filler...I still hold the position that a singular Use Your Illusion album with only their best works could have been a top 5 album of all time. Maybe not quite as good as Appetite because of the shock and awe that came with it in 1987 - from the now-banned alien rape scene cover to the audio overlays of Axl banging out drummer Steve Adler's girlfriend in the studio on Rocket really had it all - but still far better than almost every other hard rock album that's been released in the past 25 years.), and I think it's only fitting to give this new work a listen and form an opinion. I've heard it's over-produced, but with 17 years to dicker with the 12 or 13 tracks on it I'd expect nothing less from that angry, anal-retentive rock genius. So, when I finally break down and buy it I'll let you know my thoughts after 6 hours of continuous listening...

I've also gotten caught up in the buzz surrounding Mickey Rourke's new film, The Wrestler. It's about...wait for it...a washed up wrestler. It's directed by the same guy who directed Requiem for a Dream, a movie that gives me the willies but I feel the need to watch it about every 3 months. I find his work with a camera and scene set-ups captivating, especially because I know very little about movie making other than there can be a lot of money in it if you get lucky. I'm a big fan of money. I like it. I use it. I have a little. I keep it in a jar on top of my refrigerator. I'd like to put more in that jar. I haven't been excited about seeing a movie in quite some time (funny story. I couldn't remember the last movie I was excited about seeing so I wasn't going to try to make one up just to be clever. But as I'm grammar checking a commercial for the dvd release of Burn After Reading came on the boob tube. That is the last movie I was excited to see. The Coen Brothers are crafty.), so I don't care if it doesn't play in L/A. Or in Maine, or New England. If I have to go to NYC I'm seeing this movie before the new year. It's caught my attention. Stay tuned...


When I sat down I only planned to write about Chinese Democracy and The Wrestler. Consider my microeconomics lesson and the random Guns facts free gifts for this holiday season. And free gifts, my friends, are priceless. Cheers.

No comments:

Post a Comment