Each year between Halloween and Christmas we are barraged with reports taking the economy’s pulse based on holiday spending. Are we spending enough to stimulate the economy? Are we on track to beat last year’s numbers? And, indeed, holiday spending is important for retailers, many of whom sustain themselves on activity between the goblins’ departure and Santa’s arrival. While December is only one-12th of the year, it brings at least a sixth of the year’s business at department and jewelry stores.

But is holiday spending even good for the economy? The surprising answer is somewhere between maybe and not really. The problem is that gift-giving is a very sloppy method for matching stuff with people. As an economist, I look at the estimated $65 billion in holiday spending coming this year, and I see an orgy of value destruction.

To understand this, consider that every transaction in the economy has two parties, a seller and a buyer. Sellers benefit from a transaction by getting a price that covers their costs and delivers some surplus in the form of profit. Similarly, the sellers’ employees and suppliers get some surplus that brings them to work chipper. In normal - nongift - transactions, buyers also get some surplus. They see an item for, say, $50 and only buy it if it’s worth at least $50 to them. This surplus is a big deal: When your child is crying with an ear infection, you’d gladly pay hundreds or perhaps even thousands of dollars for a cure. Antibiotics, available for a few dollars, provide enormous surplus for buyers.

Compare this to what happens when you give a gift: When you spend $50 on me, you’re operating at significant disadvantage. You don’t know what I like. I might not have been willing to pay anything for the item you purchase for me with $50. While $50 in spending normally produces at least $50 worth of satisfaction, there’s no guarantee that $50 in gift spending will produce nearly as much satisfaction for the recipient. And if you buy me something worth nothing to me, you have destroyed at least $50 worth of value. You may as well have lit that sweater on fire.

Over the years, I’ve conducted numerous surveys to compare the satisfaction derived from gifts with items people purchase for themselves. The answer that emerges is that people value items they buy for themselves nearly 20 percent more. This means that the $65 billion in annual holiday spending generates about $12 billion less satisfaction than it would if we spend the money on ourselves.