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Buying the perfect gift? Fuhgeddaboudit

You're not alone if you didn't get what you wanted this year


by: TRIBUNE PHOTO: CHRISTOPHER ONSTOTT - Shoppers at The Real Mother Goose store downtown can usually find something unique, but sometimes the price matters more.In the lobby of a Pearl District fitness studio last week, someone asked the handful of men and women waiting for class if any of them had received the holiday gift of their dreams this year.

When nobody answered, a second question followed: Could anyone recall the best holiday gift they had ever been given? A few mumblers said they’d have to think about it.

It was just days after Christmas. No doubt, family members and friends of those people had spent countless hours and a fair amount of money on presents they thought would be perfect.

But apparently they weren’t.

According to economists and marketing experts, it’s no surprise that few people receive holiday presents they cherish. That’s not the way the holidays are set up, they say, and giving pleasure to the recipient is not what gift giving is primarily about.

“Gifts are not about the receiver, gifts are about the giver,” says Portland State University economist James Woods.

Woods likes to cite studies by a trio of Norwegian psychologists who posed to students the option of getting something prestigious and elegant, or something useful. They tried a designer scarf vs. a practical jacket, and an expensive bottle of wine vs. two moderately priced bottles. When asked which they would give as a present, students consistently chose the elegant. When asked which they would rather receive, they opted for the useful.

“This tells you it is the perception of the giver that is going to be most important,” Woods says.

People aren’t really choosing gifts based on what they think the recipient will like. Gift-givers, Woods says, are hamstrung by the ideas of obligation and reciprocity. They’re wondering about what they are supposed to give, what their gift will yield in return, and just plain showing off, rather than selecting what the recipient would truly enjoy.

Better choices

John Miller, a salesman at The Real Mother Goose’s downtown Portland store, says he can often tell when ulterior gift motives are at work. He’ll show a husband elegant jewelry that meets all the criteria the husband says his wife would want. But what he’ll hear, Miller says, is, ‘Oh, I need something nicer.’

“What they mean is more expensive.”

Miller’s boss, Mother Goose co-owner Judy Gillis, says she and friends take the obligation and expectation out of holiday buying by agreeing to give gifts randomly, rather than when they are expected.

“If I see something my friend will like I pick it up and I keep it for the next occasion,” Gillis says. “Sometimes I give it to them right then and at Christmastime we don’t do anything.

“People over-think and over-worry.”

PSU’s Woods says his family sticks to holiday gift-giving rules: no gifts to nieces and nephews, in-laws get gifts but only family-useful gifts, not gifts intended for the individual in-law, and even in his little nuclear family only small gifts are allowed.

The reason? “Partially it’s me,” Woods says. “I’m a cheapskate.”

More important, he says, is he’s bad at giving gifts. And that’s because he’s bad at getting gifts — he almost never gets joy from material presents.

“Why should I be good at something (gifts) I absolutely detest?” he says.

Knowing he’s bad at giving gifts, Woods feels the demands of obligation and reciprocity. Easier, he says, to just set rules that take some of the emotional weight out of holiday gift giving in the first place, adding that he considers handmade gifts just as expensive as bought gifts because time can be equated to money.

University of Portland economist Mark Meckler understands Woods’ dilemma. Meckler says many studies have shown that unreasonable expectations play a consistent role when gifts are involved. Economists even have a phrase for that — overestimation bias — though Meckler points out that behavioral economists have catchy phrases for just about everything people do.

“Whenever you think about a good thing that’s going to

happen, you always overestimate how great it’s going to be,” Meckler says.

So when you are expecting a holiday gift, with weeks and weeks to think about what it may be, the reality rarely can measure up to the anticipation.

“The more time we have to consider Christmas is coming, the more you’re going to let overestimation bias kick in and the more you’re going to feel like it’s not what you were hoping for,” Meckler says.

Another factor making holiday gift-giving so complex, according to Meckler, is, and yes, here’s another economics textbook phrase — the paradox of choice. No matter what you give or get, Meckler says, part of your brain is wondering if you could have given something better or received something better. After all, those pre-holiday advertisements and commercials have inundated people with the lure of better choices.

Social capital theory

Lan Jiang, a University of Oregon assistant professor of marketing, says the material prosperity of our culture gets in the way of logical gift-giving in all sorts of ways.

“A lot of people overrate the happiness that can be brought by material goods,” says Jiang.

Lottery winners who have been studied consistently reveal this effect, according to Jiang, expecting their new riches to bring them joy but finding just a few months later that the effect has worn off.

Since people adapt to the joy brought by material things very quickly, Jiang says asking them to recall favorite gifts represents a tough question.

Jiang subscribes to the social capital theory of gifts, believing that most gifts are given for complex reasons having to do with the relationship between giver and recipient. Some give gifts they hope will encourage recipients to think well of them. Some want to be seen as generous or wealthy.

Someone who gives an OMSI membership might want to show that he or she has an interest in science. And some gifts, Jiang says, are intended to show how creative the gift-giver can be.

But all these motivations, Jiang says, are fundamentally selfish — more about the giver than what the receiver will enjoy the most.

So what did Jiang give this year? A number of her friends received symphony tickets, and she admits she’s not even sure her friends like classical music.

“I want to show I’m an elegant person,” she admits.

Nevertheless, Jiang isn’t a fan of wish lists as a way of ensuring people get what they really want. They are too functional for her taste.

“You want people to think about the gift they give you,” she says.

Transferring wealth

Not necessarily, says Joel Waldfogel, a University of Minnesota economist and author of “Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays.” Waldfogel can’t immediately recall what he received a week and a half ago for Christmas, which is appropriate given his study on gift-giving.

“Usually we just do disastrously,” he says.

A few years ago, Waldfogel asked a group of university students what they had just received for the holidays and how much the presents were worth to them — what he would have to pay to buy the gifts from them. Then he investigated what the givers of those gifts had actually paid.

Waldfogel discovered that recipients didn’t value their gifts close to what had been paid for them. On average, students said they would take $80 for every $100 worth of presents they had received. And that $20 represents what Waldfogel calls “the deadweight loss of Christmas.”

When you add up all the holiday gifts given across the country, and take away 20 percent, the deadweight loss of Christmas, according to Waldfogel, comes to $16 billion a year that he considers “vaporized.”

That’s a bad hit for the U.S. economy, according to Waldfogel, because in the broadest sense it represents waste and inefficiency. And nothing offends an economist more than waste and inefficiency.

Waldfogel says cash presents are too tacky. His solution is gift cards, even though gift cards that are never redeemed represent about $8 billion in inefficiency a year. Still, that particular inefficiency isn’t waste, but transferred wealth, he says. The $8 billion that isn’t redeemed is wealth transferred back to the stores and the shareholders of those companies that issued the gift cards.

Waldfogel says annual surveys by the National Retail Federation consistently show that people are hoping for gift cards during the holidays. And that’s what they should be getting, in his opinion.

“The cure is people making their own decisions,” he says.

A golden box

University of Oregon economist Bill Harbaugh says there’s another factor involved in giving cash or gift cards: they are exchangeable.

“If I give my wife $1,000 to show that I care about her, she can then take that $1,000 and give it to the lady down the street,” Harbaugh says.

Pretty soon, in his estimation, the meaning of the gift has been lost.

Harbaugh says the perfect holiday present, signaling to the recipient that he or she holds a special place in the life of the giver, will be expensive and it won’t be exchangeable.

“So the perfect gift is a very elaborately gold-wrapped box with nothing inside,” he says. “It costs $1,000 to wrap up this present, you give it to a special person in your life, they know you spent $1,000 on them, and once they open it up it’s ruined.”

Harbaugh has another perfect gift idea: a vacation trip for the two of them that would show his commitment to the relationship but not be exchangeable.

For those who still think a well-chosen sweater or earrings are best, Harbaugh won’t disagree.

“It’s just a theory and may still need tune-up work,” he says.