Showing posts with label Christmas. Show all posts
Showing posts with label Christmas. Show all posts

Wednesday, December 7, 2016

Deadweight loss during the holidays

Great video on the economics of giving by Marginal Revolutions's Tyler Cowan and Alex Taborrok.

Pop quiz: Suppose you have $20 in your budget for a gift to Aunt Mabel.  How do you make sure that Mabel gets at least $20 worth of enjoyment?  Easy answer: give her $20 in cash or Amazon gift card.

But do we really want to spend the holidays trading $20 bills with each other?  The video brings up other motives for gift giving, but I am not sure making charitable contributions in Mabel's name is the answer.  She might rather have the $20.