The Greatest Gift of All (Economically Speaking)

Dec. 23 (Bloomberg) -- In January 1993, Joel Waldfogelasked 86 undergraduate students whether they liked theirChristmas gifts. But Waldfogel is an economist, so he phrasedthe question more precisely, asking them how much they would’vepaid to buy those items for themselves.

The results were grim, at least for the gift-givers: Thestudents estimated that their gifts had cost $438.20 -- but theysaid the most they would have been willing to pay for them was$313.40. Two months later, Waldfogel rounded up 58 more studentsand asked them how much cash it would have taken to make them“indifferent between the gift and the cash.” These studentsestimated that their holiday gifts had cost $508.90 on average.But they would’ve been just as happy with $462.10 in cash.