Dreading useless, deadweight Christmas gifts? They have some value, after all

The psychology of gift giving at Christmas time is a gold mine for economists. Max Jeganathan explores what makes a gift meaningful for the Sydney Morning Herald.

Imagine unwrapping a Christmas present to discover … a 2024 calendar dedicated to dogs pooping in beautiful places. How about a cushion with Nicolas Cage’s picture on it? Or an impossible jigsaw puzzle of a plain blue sky? They’re all part of the growing selection of eccentricities available through Amazon’s search function proudly titled ‘useless gifts’.

Gift selection remains for many of us – including me – an anxiety-producing experience akin to a dentist’s waiting room or an RBA decision on interest rates. The ‘Amazon-ification’ of our struggle – systematising the useless for our convenience – suggests that surrender may be the easiest way out.

Recently released research suggests that this Christmas the average Aussie will spend around $800 on Christmas presents for others. Statistically our most commonly given gifts continue to be clothing, vouchers, food, toys, games and books. Not much to see here. However, a closer look at (and through) the science of gift-giving suggests that maybe it’s not the gift – or even the thought – that counts.

The economists, psychologists, anthropologists and sociologists have all weighed in on giftology – the study of giving and receiving stuff. As you’d expect, the scholarship valiantly tries to science its way to how we can crack the code of Christmas shopping. Gifts are studied in the context of optimising happiness, maximising utility and of course, that old chestnut – a cost-benefit analysis.

In his book Scroogenomics, economist Joel Waldfogel estimates that $4 out of every $10 spent on gifts is ‘deadweight’ – meaning that it’s not valued by the receiver at the level of its cost to the giver.

Oxford economist Tim Harford agrees. He gives the example of receiving tea as a gift. “It might be thoughtful, but I don’t like tea. It’s a waste…dead weight,” he says. Tough crowd.

The Yale Centre for Customer Insights offers a diagnosis. Apparently, too many givers lack psychological proximity to their receivers. They simply don’t know them well enough. Meanwhile, receivers – ever focused on what they want – tend to judge gifts (and their givers) based on usefulness.

To overcome these obstacles, some of the experts call for a more economically rational approach. To maximise happiness, we need to make our gifts useful, functional and valuable. And when that’s too tricky – according to the research – cash works just fine.

Discouraged and dehumanised yet? Be of good cheer. There’s more to the story.

Many Christmases ago, my father gave me a watch for Christmas. It was nice. Not fancy, but nice. I didn’t particularly want one and I already owned one. But it was important. Why? Because he paid for it with some money he’d been gifted for his 50th birthday, just a few months earlier. The watch – which I still treasure – reflected our bond and underlined our relationship.

In contrast to the Scroogenomic scholarship, less lugubrious studies have shown that gifts can strengthen the future giver-recipient connection, even if they have low economic value. “Gift-giving is a sign we care about the people in our lives,” says Dr. Michael Norton from Harvard Business School. Regardless of what they are, gifts given in the right spirit catalyse human connection, release oxytocin (the cuddle hormone) and increase generosity, happiness, honesty and even cardio-vascular health.

That we give and how we give seems more important than what we give. We are homo relationalis more than we are homo economicus. We seek connection before we seek material gain. “The only gift is a portion of thyself,” said writer Ralph Waldo Emerson.

The Bible’s account of the birth of Jesus tells of a group of learned and wealthy men from the East who visited Jesus and his parents. We aren’t given many details, but we’re told they brought gifts of gold, frankincense and myrrh. They may have failed the practical test of value. What use does a baby have for a lump of gold and some perfume made from tree sap?! But these gifts had a deeper significance. At the time, they were – symbolically and culturally – gifts fit for a king.

Whether you give clothes, cash or Nicolas Cage cushions this Christmas, the story of these mysterious travellers – Christmas card regulars – defies our modern sensibilities. Clearly not proponents of a cost-benefit analysis, they came to champion something else. They sought connection.

They travelled for months with gifts to offer honour and esteem. They came believing that somehow this baby was a king, and he had written himself into their story, and all our stories. They knew that gifts can weave the threads of our stories together. They knew that by giving, we can write ourselves into each other’s worlds.   

Max Jeganathan is Senior Research Fellow at the Centre for Public Christianity. He served as a political and social policy adviser in the Rudd and Gillard Labor Governments and is undertaking a PhD in law on human dignity.

This article first appeared in the Sydney Morning Herald.

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