The Science of Gift Giving
NEW YORK ( MainStreet) If you just spent the last weekend draining your bank account in search of unique, thoughtful holiday presents to surprise your loved ones, I'm about to be the bearer of bad news.
Recent studies found that most of us don't appreciate the unique, expensive, or unexpected presents that our friends and relatives spend hours hunting for. Instead, as it turns out, we're pretty easy to shop for. We tell you what we want, don't put a premium on pricey presents, and really, really like cash and gift cards.
"Although givers believe that investing more thought or money into a gift will increase recipient appreciation, recipients are generally unaffected by the thought or money invested," wrote University of Cincinnati professor Mary Steffel and University of Florida professor Robyn LeBoeuf in a study set to be published in the upcoming April issue of the Journal of Consumer Research .
And we waste a lot of money on gifts people don't like very much. On average people valued presents they receive at less than 85% of what gift-givers paid for them, according to a 2008 survey. The result is that of the $66 billion spent annually in the United States on gifts, almost $12 billion is a deadweight loss, Joel Waldfogel, professor of applied economics at the University of Minnesota, wrote in his book Scroogenomics: Why You Shouldn't Buy Presents for the Holidays (Princeton University Press, 2009). And collectively, Americans spend 2.8 billion hours picking those not-so-perfect holiday gifts each year, he found.
People aren't greedy either. Recipients didn't appreciate expensive birthday presents or engagement rings more than cheaper ones, a 2008 Stanford Graduate School of Business study found.
So why do we spend so much time and money picking out presents? Many of us worry that unless we select a gift on our own, our friends will think that we're too lazy, or don't know them well enough, to buy a good gift.
But exactly the opposite is true. People thought gifts bought from their Amazon wish lists were more thoughtful and personal than gifts others chose for them, according to a 2011 article in the Journal of Experimental Social Psychology . The study also found that people preferred gifts from their wedding registries to those selected by guests. And they thought birthday presents from their spouses were more considerate if they received something they had asked for, rather than a surprise.
"Despite the fact that people spend a significant amount of time and money on gift-giving, their purchases often are less appreciated than they might hope," study authors Francesca Gino and Francis Flynn wrote. "Research consistently shows that many individuals are poor gift givers, often purchasing gifts that others would not choose to buy themselves or focusing on the wrong criterion when attempting to select a meaningful gift."