Bad holiday gifts contribute to the global economy downturns

 Joel Waldfogel, author of the book titled Scroogenomics, expressed an idea that bad presents given on holidays to relatives or friends result in serious losses to the global economy. He thinks bad gift giving is the scourge of the holiday season and is cheating consumers out of $25 billion worth of satisfaction. 

According to his estimates gifts chosen for you are on average worth 20 percent less than the things you buy for yourself. Thus, developing his theory further Waldfogel says that if 20 percent is extrapolated to the global population, it adds up to some pretty costly mistakes. 

The typical expenditure during the U.S. holiday season is $65 billion per year and worldwide it is $145 billion, according to Waldfogel. 

"Around the world we're missing out on $25 billion worth of satisfaction again because of the mistaken choices made by others, as opposed to the choices we would have made for ourselves," he said. 

While admitting the value of the joy of giving Waldfogel still notes that it is the good gift that adds to the joy.

Waldfogel says that serial bad-gift givers can buy gift cards because they give the choice to the receiver, and they don't have the same stigma as cash.

Peter Dixon, senior economist at Commerzbank Securities, notes that if consumers stopped giving bad gifts the effect on the global economy could be serious during this period of tentative recovery.

"From a growth-driven market perspective, I'm afraid it's not something we'd be desperate to see," Dixon said.

"It goes to the very heart of the consumer society in which we operate… It would certainly cause us to have to rethink our social priorities very significantly if we were to cut back on consumption in this way," Dixon said.