This is the Kader Daily Podcast for Saturday, May 28th, 2022. I'm Caleb Brown.

Economists sometimes enjoy a bit too much the cold analytical reasoning that leads to what many people consider

outlandish conclusions. Gifting is one such area. Tony Gill is a professor of the

Department of Political Science at the University of Washington. We spoke about the economics of gifting in Las Vegas last month.

Economists sometimes revel in being sort of cold-blooded and ruthless efficiency machines and one of the one of the cases where that presents itself is the case of gifts.

When you give a gift an economist might say you should not give an item, you should

give cash because cash is gives people the widest variety of expressing their own preferences and we shouldn't substitute

our own preferences for the preferences of other people. You give a gift. They can't, if they really

wanted it, they'd already have it.

And that is, I've heard that from many economists, and of course it doesn't capture everything

about why one would give a gift but it is one

argument that I hear and it actually has a name for it Caleb they call it

scruogenomics it's a book written by Joel Waldfogel that was based upon a 1983 American Economic Review

article that was, I thought a little bit tongue-in-cheek, it poked fun at thin utility economists saying, you know, we're just utility

maximizers and he made the argument that if you give somebody a gift and they don't want or need that gift, it becomes a huge dead weight loss.

It's the classic ugly cat sweater that your aunt gives you that sits in your closet,

the threads that made up that sweater could have

gone to make something else for somebody who would have desired it, but here

you're never going to wear it and that's a problem but it also sits near closet taking up valuable

closet space and Professor Waldfogel went out and tried to measure this and he

found out that through a number of surveys with students who've received gifts that anywhere between

between seven and 15% of the value of gifts

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