Good news for Scrooges: Why giving Christmas presents is pointless and bad for the economy



Most of us know what it's like to get a Christmas present we don't like or need.



But opening a novelty Billy the Singing Bass isn't just disappointing-it's also bad for the economy.



Christmas presents are a complete waste of money, and amount to global wealth destruction, a leading economist has claimed.

Bad Santa: Joel Waldfogel, Professor of Applied Economics at the University of Minnesota, says giving presents is stupid and bad for the economy

Over the holiday season people get into debt and pay interest on unpaid balances for months afterwards.



And much of this spending is in fact pointless- receivers value presents at on average 20 per cent less than what the giver paid, research by Joel Waldfogel, Professor of Applied Economics at the University of Minnesota shows .



So a present that you paid $10 for may only be worth $8 to the recipient, Fox Business reported. And if it is regifted, the new recipient may believe that the gift is worth only $6.

Of an estimated $70 billion Americans spend on holiday gift-giving, $14 billion is wasted, he said in a webcast sponsored by the National Science Foundation.

Around the world, that figure doubles to $28 billion flushed away on what Waldfogel calls 'vaporized satisfaction.'



Pointless: While people shop sensibly when it comes to choosing items for themselves, they are hopeless at picking out gifts that relatives they don't see often will value (File photo)

The reason for the disparity in how we value goods is that, while people shop sensibly when it comes to choosing items for themselves, they are hopeless at picking out gifts that relatives they don't see often will value.



Retailers have created a whole industry of novelty gifts and useless gadgets to take advantage of this dilemma.



In his 2009 book, Scroogenomics: Why You Shouldn't Buy Presents for the Holidays, Waldfogel wrote: 'If Christmas were a government program, the Citizens against Government Waste would classify the entire...annual expenditure as 'waste,' 'The bucket Santa uses...isn't just leaking, it's gushing.'



The solution to the problem is to give cash which allows gift recipients to efficiently find value and satisfaction, while stimulating the economy .



But as some cultures consider giving money vulgar, Waldfogel says we should give gift vouchers instead.

This solution is not perfect -about 10% of gift-card value is never claimed, and retailers can't claim the unclaimed cards as revenues for years.

