Confounding Issues in the Deadweight Loss of Gift-Giving
AbstractWhen a gift is given, someone other than the final consumer makes the consumption choice. Thus there is a possibility that the gift will not match the preferences of the receiver, i.e., the gift will represent a wise use of the money given the gift-giver's tastes but not necessarily a wise use of money given the recipient's tastes. In other words, gift giving can result in a deadweight loss. This paper addresses and clarifies the discrepancy between Waldfogel's (1993) finding of a deadweight loss from gift giving and Solnick and Hemenway's (1996) finding of a deadweight gain from gift giving. It also builds on some of the concerns raised by Ruffle and Tykocinski (2000).
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Bibliographic InfoArticle provided by Middle Tennessee State University, Business and Economic Research Center in its journal Journal for Economic Educators.
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Find related papers by JEL classification:
- A2 - General Economics and Teaching - - Economic Education and Teaching of Economics
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
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- Waldfogel, Joel, 1993. "The Deadweight Loss of Christmas," American Economic Review, American Economic Association, vol. 83(5), pages 1328-36, December.
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