The joys - and the economic waste - of giving and receiving

According to a newspaper report, an average Ulaanbaatar family spent around Tg 800,000 on celebrating Tsagaan Sar, divided between food for guests and gifts for relatives.  These are naturally very approximate figures, all the more so because urban Mongolia is marked by wide disparity in purchasing power. We could have a better idea of how much is spent on the celebrations if figures on retail sales were available, but it is surprising that the official Mongolian fondness for figures and statistics does not extend to this. However, the amount of money spent countrywide on gifts for the lunar new year, as the ox gave way to the tiger, must have been enormous. 

Someone described the Christmas buying spree in the West as  the public playing Santa Claus to merchants. Is there any reason why so much money should be spent on buying gifts in a country like Mongolia that is still a long way from the end of the global economic crisis, exacerbated by the local dzud? Did the people buy this year’s gifts with next year’s money? Ethics aside, does holiday spending  make economic sense? A growing number of analysts think it does not.

The most well-known of those who look at this as “an orgy of value destruction” is Joel Waldfogel, who has jokingly referred to himself as Professor Scrooge, after the Dickensian miser. His most recent book on the economics of gift giving is called “Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays”. This was published late last year but he has been at it for some 20 years now. Intrigued by what he perceived as a mismatch between wants and gifts, in 1993 he wrote a paper that has proved seminal in the literature on the issue.