London, Dec 25 (ANI): Christmas presents are a complete waste of money, and amount to global wealth destruction, a leading economist has claimed.
According to Joel Waldfogel, a professor of Applied Economics at the University of Minnesota, over the holiday season people get into debt and pay interest on unpaid balances for months afterwards.
He showed that much of this spending is in fact pointless, as receivers value presents at on average 20 percent less than what the giver paid.
Of an estimated 70 billion dollars Americans spend on holiday gift-giving, 14 billion dollars is wasted, he said in a webcast sponsored by the National Science Foundation.
Around the world, that figure doubles to 28 billion dollars flushed away on what Waldfogel calls 'vaporized satisfaction'.
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.
"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 Daily mail quoted Waldfogel as writing in his book 'Scroogenomics: Why You Shouldn't Buy Presents for the Holidays'.
The solution to the problem is to give cash that allows gift recipients to efficiently find value and satisfaction, while stimulating the economy. s some cultures consider giving money vulgar, Waldfogel suggests gift vouchers instead.
This solution is not perfect, as about 10 percent of gift-card value is never claimed, and retailers can't claim the unclaimed cards as revenues for years. (ANI)
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