It’s everyone’s least favorite part of the Christmas season: You’re expected to get a present for your brother-in-law, but you have no idea what he wants. Or conversely, your aunt gets you a sweater that you have zero interest in ever wearing. The result: People often get a lot less value from their presents than the giver spent on them.
More than 20 years ago, economist Joel Waldfogel dubbed this the “deadweight loss of Christmas.” It’s the gap between how much a gift giver spends on a present and how much the recipient values the gift. Waldfogel’s research found that “holiday gift-giving destroys between 10 percent and a third of the value of gifts.”
But Waldfogel told me in a Tuesday interview that it’s often not realistic to stop giving gifts altogether. Instead, he suggested some strategies — like giving gift cards or making donations to charity in a recipient’s name — to minimize the wastefulness of the holiday season.
The transcript has been edited for length and clarity. ...
Whatever happened to "it's the thought that counts"? This phrase suggests that there is a component of getting a gift (a signal that someone cares enough about you to try to buy you something you like) that increases utility. The discussion misses this benefit.
And here is the A part of the Q&A where they are looking critically at gift cards (as a way of giving cash):
Suppose I spend $100 on a card and give it to a friend. Then suppose he redeems $75 and forgets the rest. The $25 eventually belongs either to the company issuing the card or to the state government, depending on the state.
While my friend only got $75 worth of spending out of my purchase, the other $25 is not destroyed. It's just transferred from me to the retailer's shareholders. It would be way worse, in some sense, to spend $100 on a sweater that my friend values at only $75.
Having said all that, I have long advocated a simple tweak to gift cards: Stores should issue cards whose unredeemed balances go straight to charity after 24 months. Stores could crow about the money that they're sending to charity, and buyers would be assured that someone worthy — either their recipients or some good cause — is getting their money.
If the $25 transfer from the buyer to seller is OK for a gift card, why doesn't the same argument hold with the sweater? I think it does. There is a transfer either way. Gift cards help avoid the mismatch of preferences but they detract away from the "it's the thought that counts" utility boost.
And considering the tweak, my guess is that the sweater ends up with charity (Goodwill) too.
I'm struggling to follow the logic of the following:
It has been a busy week, and with everything else going on I haven't had a chance to post on Zika, which I know has been in the news a bit.
I have received all sorts of emails and FB comments this week on Zika. Some people want me to pass a "clean" bill (which I suppose means not paying for it with spending reductions elsewhere). Other folks want us to fund more research if we can find a way to pay for it.
No one has written me yet, though, to ask what might be the best question: do we really need government-funded research at all. And before you inundate me with pictures of children with birth defects, consider this:
Brazil's microcephaly epidemic continues to pose a mystery -- if Zika is the culprit, why are there no similar epidemics in other countries also hit hard by the virus? In Brazil, the microcephaly rate soared with more than 1,500 confirmed cases. But in Colombia, a recent study of nearly 12,000 pregnant women infected with Zika found zero microcephaly cases. If Zika is to blame for microcephaly, where are the missing cases? Perhaps there is another reason for the epidemic in Brazil. According to a new report by the New England Complex Systems Institute (NECSI), the number of missing cases in Colombia and elsewhere raises serious questions about the assumed connection between Zika and microcephaly.
That isn't from some politicians website or some right-wing advocacy group. It is from Science Daily -- which as best I can tell is a reputable outlet --- and it references research published in the New England Journal of Medicine -- which I KNOW is a reputable outlet.
Take a look. I'd be curious to know if this impacts anyone's opinion on spending (and borrowing) as much as $2,000,000,000 on Zika research. [emphasis added]
Because we don;t know the answers to difficult questions, the answers to which could provide large scale public benefit, and for which the private incentives for research are misaligned with the public benefits, we shouldn't fund scientific research.
Ladies and gentleman, I give you the next budget director of the President of the United States of America, Mick Mulvaney*.
*And yes, I know, Representative Mulvaney deleted the post from his Facebook page, but Snopes says it's true. And I KNOW Snopes is a credible source.
Our country has been held back over the past eight years because the appropriate balance between federal and state powers has become totally skewed. Individual liberty and our constitutional order have been threatened. People's aspirations have been capped by a federal government that overextended its reach, and in no place has this been more apparent than at the EPA. The EPA has become a one-agency job killer, putting working people out of a job and increasing costs for everyone.
The far left has tried to distort Pruitt's views in a lame attempt to make him into an anti-science boogeyman. The Scott Pruitt I know is far from it. Unlike liberals who want to shut down any rational debate about climate change, Pruitt has acknowledged human impact on the climate and supports a robust discussion about its effects and what the government should and shouldn't do to address it.
In a 2013 speech, Pruitt demonstrated that he understood the proper role of the EPA, completely repudiating Democrats' ludicrous claims about how he would lead the agency:
"May I say this to you and please hear my heart on this. ... It's not good for us to say that the EPA doesn't have any role. Because just think about it, you have a power plant in Arkansas that's burning coal irresponsibly or inconsistent with the statue, and it comes over to Oklahoma and Texas. So there is a role for the EPA, it's just that they assert themselves in ways that are above that role."
At the EPA, Pruitt will balance the importance of protecting our environment -- ensuring clean air and water and being good stewards of our natural resources -- with maximizing the ability of free people to innovate and create without interference from the federal government.
I paid $60 for an ~8 foot tree at the choose and cut lot on Poplar Grove (Boone, NC):
For the past several years, I’ve bought my Christmas tree from a stand around the corner from my apartment in Brooklyn. It was always the same, simple price: $10 per foot, which seemed reasonable when I was buying a 5-foot tree for my tiny little walkup. This year, I moved to an apartment with a proper living room and decided to go big. I wanted a tree that was taller than I am. The stand in my new neighborhood charges less — $9 per foot — but I was going for a 6-footer, and something about crossing the $50 Rubicon didn’t sit well with me.
So I took to Twitter to try to gain some perspective.
Ultimately, I got about 150 responses from 29 states. Not the most comprehensive data set, but some interesting results. The cheapest tree, other than for those who cut their own, was in Corvallis, Oregon, for $3.10 per foot. That makes sense, because there are trees everywhere in Oregon.
The most expensive tree I heard about was $35.71 per foot in the Culver City area of Los Angeles. That also makes sense, because LA is ridiculous in every way.
Overall, the average price was $8.70 per foot. Here’s where I got responses from.
Most interesting to me, though, was the variation in results within an area. Take a look at New York City, for instance. In Hell’s Kitchen, on the western side of Manhattan, you can buy a tree for $6.66 per foot. (It is Hell’s Kitchen after all.) But walk a few blocks south to Chelsea, and somebody’s charging $20 per foot. In a place like New York, where many people don’t have cars, vendors can set the price knowing that many people won’t be comparison shopping. ...
The one thing I heard consistently, though: If you really want to negotiate for a good price, wait till Christmas Eve. It’s a buyer’s market.
I encountered with Department of Agricultural, Environmental Developmental Economics in OSU by professor Tim Haab’s blog on environment economics http://www.env-econ.net/, where I learn the most cutting edge of academic research.
Oh crap. I better take this a little more serious.
I would like to personally congratulate you as your blog Environmental Economics has been selected by our panelist as one of the Top 100 Economics Blogs on the web.
I personally give you a high-five and want to thank you for your contribution to this world. This is the most comprehensive list of Top 100 Economics Blogs on the internet and I’m honored to have you as part of this!
Also, you have the honor of displaying the following badge on your blog. Use the below code to display this badge proudly on your blog.
The Harvard effect: Mankiw is ranked #31 AND #33.
Feedspot would like for your to use their feed service. If you would like the feed for more than one blog they'll say you can upgrade for free. This free service seems to be for 1 year and then they'll charge you about $24. I think.
In this virtual issue of the American Journal of Agricultural Economics, we highlight recent research on agri-environmental issues. Barely discussed in the literature twenty years ago, articles that focus on agri-environmental issues are now prominent in the agricultural economics research agenda.
A particularly important theme featured in this collection is the valuation of environmental amenities, including recreation, native vegetation, and, more generally, ecosystem services. A second dominant theme is water, including consumers' response to a bottled water tax, allocative efficiency with privatized water rights versus irrigation districts, and water availability as a determinant of agricultural land values. Another interesting topic that is featured in this collection due to rapidly growing public concern is invasive species and disease resistance.
The collection concludes with two papers on environmental regulation, one involving the costs of regulation for a typical U.S. dairy farm, and the second involving the impact of changing wolf pack locations on beef production. Issues involving climate change were intentionally not included in this collection because this broad and important topic is deserving of its own special issue.
Overall, the ten papers in this collection nicely reveal how innovative methods of theoretical modeling, survey design, and econometric modeling are used to analyze various types of environmentally-related market failures and to justify creative policy proposals.
"This blog aims to look at more of the microeconomic ideas that can be used toward environmental ends. Bringing to bear a large quantity of external sources and articles, this blog presents a clear vision of what economic environmentalism can be."
Don't believe what they're saying
And allow me a quick moment to gush: ... The env-econ.net blog was more or less a lifeline in that period of my life, as it was one of the few ways I stayed plugged into the env. econ scene. -- Anonymous
... the Environmental Economics blog ... is now the default homepage on my browser (but then again, I guess I am a wonk -- a word I learned on the E.E. blog). That is a very nice service to the profession. -- Anonymous
"... I try and read the blog everyday and have pointed it out to other faculty who have their students read it for class. It is truly one of the best things in the blogosphere." -- Anonymous