Does re-sorting reduce the deadweight loss of Christmas?
John Palmer has some great thoughts on re-gifting. There is a fairly well-known article by Joel Waldfogel in the American Economic Review that showed that giving Christmas gifts destroys 13-18% the cost of purchasing the gift (that is, the value to the recipient is about 13-18% lower than the price the giver paid.) John explains this here, and there’s an older Economist article with the same thought. An article in rediff.com from India has a very different take, citing other pieces that consider show an increase in welfare from giving. Waldfogel continues to argue his case using newer surveys. Waldfogel also found that the gap between price and value to recipient is much greater between family members than between friends. In John’s piece one of his correspondents refer to this as peer-relationship gifting, which is done with a “grim resolve”. I had this happen the other day as I was trying to buy gifts for my nieces and nephew. All live back in my hometown in New Hampshire, and I see
