Economics Behind Holiday Gift Giving
I am taking our blog completely off topic in the spirit of Christmas! I read something very interesting on WePay.com this morning about holiday misgivings and the surprising personal economics behind it all.
Behavioral studies show that individuals place a lower value (up to 18%) on items they receive as gifts than the value of the same item they purchase themselves. People mentally mark items down in their heads because they are gifts. See the infographic below:
Among the more interesting findings from this study:
*$91 billion dollars were spent on gift cards this season ($2.5 billion of those dollars will go unused)
*A diamond ring that retails at $1,000 is valued at $820 by the recipient
*At least one gift per person is: never opened (42%), returned (38%), or regifted (28%)
As WePay suggests, in a time when many are still suffering from the macro and micro effects of the economic downturn, it may be a wise decision to rethink what it really means to gift.
