'Tis NOT the season to be stressed!

Present Problems

Dec 29, 2013    •    775 Views

Dear Alexa,

I’m going to a New Year’s Eve party and I feel obligated to bring something to thank the host. I’m trying to decide between bringing a gift or a gift card.  I love the holidays, but I’m super stressed out over what to bring. What would you do?


Stressed Out


Dear Stressed Out ,

There is nothing to stress about! While I can’t pick out your gift out for you, I can help you make an informed and satisfying decision.

According to one expert, it is better to purchase a gift card to give to your host.  Economist Joel Waldfogel suggests that the value to the buyer of a gift is actually higher than to the receiver. This means that although you may find the perfect $50 gift, the receiver may only value it at $25. So, if you take the gift route, you may have fun buying the “perfect gift” for your host, but he or she might not appreciate it as much as you think. On the other hand, if you choose to give the gift card, the cost of the card will be the same as its value to the receiver. Since New Year’s is only a few days away, you may only have the time to pick out a gift card, but that means the host can buy exactly what he or she wants.

Personally I’m more a fan of going the gift route. It’s amazing to find the perfect gift for someone. Spending hours in department stores searching through endless racks of the sweaters only to stumble upon the one that you know he or she will love is an indescribable feeling. As you watch the person tear through the sparkling wrapping paper to discover your present, you smile also. Giving a gift feels more personal– it says that you paid the cost of time. You didn’t just run to the nearest store to buy a plastic card. In addition, the receiver will be surprised at what you selected.

The holidays shouldn’t be a stressful time. So fret not. If the opportunity cost of shopping is too great because you are stressed, you have a good economic reason to get the gift card.

I hope you have a blast at your party. Have a wonderful new year filled with smart economic decisions.

Happy Holidays,


P.S. if you want to learn more in depth about the economics behind my madness, check out this link:

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