Friday, November 26, 2010

Book Review: Scroogenomics: Why You Shouldn't Buy Presents for the Holidays, by Joel Waldfogel

Scroogenomics: Why You Shouldn't Buy Presents for the Holidays
by Joel Waldfogel
Princeton University Press
169 pages

Yes, I fully realize I'm a bit of a killjoy, posting a review about a book called Scroogenomics: Why You Shouldn't Buy Presents for the Holidays on this, our National Day of Shopping (also known as Black Friday). 

And yes, I fully realize the irony that a good many of my readers might very well be out doing the exact thing that economist Joel Waldfogel cautions against, instead of reading my brilliant review of this intriguing book. 

To that I say, bah humbug.  Because really, it is high time that someone tells it like it is in regards to holiday gift giving.  And in this book, that someone is economist Joel Waldfogel. 

It isn't a secret that every year we spend way too much on gifts people don't want, don't need, and would never buy for themselves.

"Walk through a major department store in December. The aisles are blocked not just with panicked shoppers but also with tables covered with 'gift items.' In the aisles near the men's clothing department, you'll find lots of golf-themed knickknacks - mugs festooned with golf balls, golf club mittens, brass tees, and so on. Would anyone buy this stuff for him-or herself?  Does anybody want it? I'll hazard a 'no' on both counts. But it's there every year, along with singing fish - and it sells - because of a confluence of reasons that together make a perfect storm for wasteful giving." (pg. 6)

According to Waldfogel, we spent $66 billion dollars on this type of crap during the 2007 holiday season.  He breaks down how he came up with this $66 billion dollar figure in great detail, including examining the retail sales for November, December and January. You'll just have to read the book for those calculations, while trusting me that his math makes much more sense than mine ever could.

Where the wastefulness comes in is with an economic term called "deadweight loss," which describes "losses to one person that are not offset by gains to someone else."   The way I understand this is if you buy me a sweater for $75, that same sweater might only be worth $25 to me.  (Or, in other words, if I was to purchase said sweater for myself, $25 would be the maximum amount I would personally spend.)  Hence, the "deadweight loss" is $50.  That's the wastefulness aspect of the holidays and when you multiply this by billions of crappy cheesy sweaters and stupid singing fish, then you're talking some big bucks being wasted.

I think this is a concept that most of us kind of already knew, but seeing these numbers tossed around is kind of sobering.  It makes me want to never buy another thing again, for any holiday. 

One might think that the solution is to give gift cards, which is logical and reflects the increase in gift card sales in recent years.  But Waldfogel states that even gift cards (while a better alternative to yet another FORE THE BEST UNCLE! golf mug) have some negatives.  They expire.  They get lost.  Sometimes they are for stores that the recipient isn't interested in. 

(For the record, I personally have no problem whatsoever with getting gift cards.  I think they are quite a very, um ...NOBLE  hint, hint, ahem, ahem! gesture.)

Waldfogel presents (heh ... pun not intended) his theories in great detail, with many supporting facts.  Scroogenomics is more wonkish than whimsy, and since I'm not a mathematician, some of the numbers-crunching made my eyes glaze over a bit.  Waldfogel calculates and compares the United States' holiday spending with that of other countries and with the amount spent in decades past, as a way of stating that this overconsumption of gift-buying isn't new. It's a valid argument and one that makes much sense. (And cents.)

So, if purchasing actual gifts and giving gift cards are both wasteful, what are we elves to do?  Waldfogel gives some solutions, with charity gift cards being among them (and I am personally going to look into for the nonprofit I work for because this particular entity was new to me). 

Although Scroogenomics has a bit more high-falutin' math than I was expecting, I still enjoyed this book which I borrowed from the library (naturally).  It's an eye-opening read jam-packed with information and facts that would likely appeal to fans of Freakonomics or Malcolm Gladwell's. (Which I am.) It's the epitome of efficient (it's about the size of my palm) which makes for a fast (and sobering) read. 

copyright 2010, Melissa (Betty and Boo's Mommy, The Betty and Boo Chronicles) If you are reading this on a blog or website other than The Betty and Boo Chronicles or via a feedreader, this content has been stolen and used without permission.


Beth S. said...

Oooh! This book looks interesting! I am a total self-righteous scrooge when it comes to the ridiculous consumerism that has consumed our country, especially around the holidays. The past couple of years I have boycotted the mall altogether and made most of my Christmas gifts.

Amy said...

Interesting book! I've really been thinking about this as well since I can't think of anything I even really want for the holidays. I was also thinking about all those gifty items that seem pointless recently while I was shopping.

booksploring said...

I always though Black Friday was Friday 13th! We don't really have a National Day of Shopping (apart from the Boxing Day sales) and I'm kind of glad about that! I always find it hard to think of useful and wanted presents for people so pretty much always resort to gift cards. Thanks for sharing - this book looks really interesting!

JoAnn said...

I'm a fan of both Malcolm Gladwell and Freakonomics, so I'm pretty sure this would appeal to me. Have always had a feeling about "deadweight loss", but who knew there was an actual term for it?

A B&N gift card is definitely a welcome gift, but who in the world really wants the singing fish??

Erin said...

Sounds like Waldfogel makes a lot of valid points. I don't think you're being a killjoy; I think you're refocusing on what the holidays should be about!

Kim (Sophisticated Dorkiness) said...

This sounds like a great book. Now that I'm home for the weekend, my family has been talking about Christmas gifts and what to get each other. I think we've given up on surprises, since we just want to get each other things that we'll all like rather than waste money on things we might not.

Anonymous said...

What a fantastic review! I was just watching a documentary called "What Would Jesus Buy?" last weekend that was talking about this very issue. I've set a very strict budget this year and I've decided that, in place of shopping this year, I'm going to try new recipes each weekend! Then, for Christmas, I'll share what I've made. I'm going to purchase a few things, but I've chosen all the presents for my family and friends very carefully this year, making sure that each one means something special, and is somehow practical and useful.

Thanks for a very insightful review!