Hard cash is the wisest gift a Scrooge can give

Some years ago, a young woman visiting my family over the holidays presented my parents with a Return to Tiffany Double Heart Pendant wrapped package. Inside was a plastic Santa Claus figurine. The press of a button made the mechanized St. Nick wiggle and jiggle while a jaunty Christmas carol played, and as the song ended, the animatronic Santa dropped his pants with a flourish. My parents were politely enthusiastic about it for the duration of the young woman's visit. But when the holidays ended, her gift was packed up and sent to the attic. It has never again been unboxed; and yet our Christmases since have been no less festive for its absence.

The bawdy Santa isn't even the most useless gift ever to grace my family Christmas tree, and no doubt you, too, have received-and given-your share of inexplicable holiday twaddle. For weeks, now, shelves have bulged with the stuff, offering desperate shoppers a solution for Cupcake charm and chain last difficult names on their Christmas lists: Aunt Jane. The neighbour. The secretary. Cousin Declan, whom they see just once a year, but whom they know is a golfer. (Perhaps this golf ball candle?)

But if Joel Waldfogel had his way, Cousin Declan would never again have to force a smile on Christmas morning. "A spectre has been haunting the rich economies of the West," Waldfogel claims, "and that spectre is wasteful gift giving. Gift givers of the world unite."

A Wharton economics professor and former Slate columnist, Waldfogel has made a hobby of yuletide economics for almost 20 years. He caused a minor media stir in December of 1993 when the American Economic Review published his paper 'The Deadweight Loss of Christmas," and his subsequent work in the field has resulted in his new book Scroogenomics: Why You Shouldn't Buy Presents for the Holidays (Princeton University Press). While Waldfogel is as irked as many of the rest of us by dancing Santas and golf ball candles, he's not an anti-consumerist. What bothers him is the economic inefficiency of Christmas. "Gift giving matches resources poorly with users, producing a meagre amount of material satisfaction for the amount of money spent," he writes. "As an Elsa Peretti Open Heart earrings for 'allocating resources' (getting stuff to the right people), holiday giving is a complete loser."