Some economists dislike Christmas. They allege that it “destroys value,” which is, in Econoland, the first and only sin. The economist Joel Waldfogel, author of Scroogenomics, goes so far as to contend that the winter holiday season is “an orgy of value destruction.”

Waldfogel’s main concern is that the value of gifts to their recipients is typically far lower than the money that was spent on them. He found that of the $65 billion spent on winter holiday gifts in 2009, about 20 percent was wasted, in the sense that the gifts were worth that much less to the recipient than they cost. And indeed, it is an inescapable fact of life that people who receive holiday gifts often don’t much like what they get. If you’ve ever been presented with a sweater that you would never wear in public or electronic equipment whose purpose escapes you, you will understand what Waldfogel is talking about.

In hard economic times, when both the government and ordinary people are trying desperately to save money, this is a sobering analysis. We don’t propose that Congress should try to solve the debt crisis by requiring people to give holiday season money to the Treasury Department rather than spending it on presents. But mis-giving does no good for anyone, and we have a few ideas about how to make it through the season a bit more easily.

IT HAS PROBABLY already occurred to you that the economic analysis of gift-giving reflects an incomplete understanding of the purpose of gifts, which involve relationships, as well as commodities, and which provide value not only to the recipient but also to the giver. Gifts represent messages—“signals,” in social science parlance—from giver to recipient. The signals tend to differ for individual givers and receivers, which explains why there are no simple answers to standard holiday etiquette questions, such as whether it is OK to give cash. Cash is best for some relationships but highly inappropriate for others. If you give your nephew $75, he’ll probably be thrilled. If you give your boss $75, it’s just weird.

Gifts also serve as investments in relationships. When interpreted this way, the destruction of value can be part of the very essence of gift-giving. If I give you a $50 gift card for Best Buy and you give me a $50 e-certificate for Amazon, economists would tolerate the exchange, since no destruction of wealth has occurred. However, very little investment has occurred, either. Suppose instead that I give you an expensive sweater that you find loathsome, and you give me a fancy travel case for which I have no use. True, each of us might think that the other has terrible taste. But we will certainly notice the effort and money that went into the purchase. In fact, destroying value in an exchange of overpriced gifts can increase the likelihood that our relationship will endure. If we weren’t committed to the relationship, why would we waste the money?