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The Deadweight Loss of Diwali


  • Waknis, Parag
  • Gaikwad, Ajit


Using a survey sample of students from a business school in India, we conduct an empirical analysis of different aspects of gift giving on the occasion of Diwali in lines with a similar analysis for Christmas in Waldfogel (1993). Based on simple OLS regression analysis, we find that accessories and electronic goods have higher yield compared to other kinds of gift items. Also, closer the relation and/ or lesser the age difference between the person gifting and the receiver lesser is the deadweight loss. This suggests that these gift givers are more capable of guessing the preferences of the gift receiver than others. We, however, did not find any systematic difference in valuation of gifts by gender of the recipients.

Suggested Citation

  • Waknis, Parag & Gaikwad, Ajit, 2006. "The Deadweight Loss of Diwali," MPRA Paper 52883, University Library of Munich, Germany, revised Jul 2011.
  • Handle: RePEc:pra:mprapa:52883

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    References listed on IDEAS

    1. Joel Waldfogel, 2005. "Does Consumer Irrationality Trump Consumer Sovereignty?," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 691-696, November.
    2. Jack L. Knetsch & J. A. Sinden, 1984. "Willingness to Pay and Compensation Demanded: Experimental Evidence of an Unexpected Disparity in Measures of Value," The Quarterly Journal of Economics, Oxford University Press, vol. 99(3), pages 507-521.
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    Cited by:

    1. Laura Birg & Anna Goeddeke, 2016. "Christmas Economics—A Sleigh Ride," Economic Inquiry, Western Economic Association International, vol. 54(4), pages 1980-1984, October.

    More about this item


    deadweight loss; gift giving; efficiency of exchange; diwali;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis


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