It’s the thought that counts, right?
eZonomics poll respondents like getting cash for their birthdays – and it seems they are not alone. Studies show that giving cash (or a well-selected voucher) can produce a bigger “bang for buck” than giving an object. Economist and university professor Joel Waldfogel detailed his studies on the topic in the tellingly titled 2009 book Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays. Waldfogel studies found people getting gifts underestimated the amount spent by 20%. He argues gift givers can try to get around the issue by asking gift receivers what they want – and says an alternative option was to give cash.
But do we like to give cash?
But a study by ING in the Netherlands found that while cash was a popular gift to receive, it was less popular among gift givers. It found 32% of respondents preferred to get cash as a present. But only half the number – or 16% – preferred to give money.
Let’s do something together
Many happiness economists argue that buying experiences makes people happier than buying objects. One example is the research paper Does consumption buy happiness? from the United States. A half-way house for giving gifts could be to buy an experience as a birthday present. The recipient may be less likely to underestimate the amount spent and it taps into the findings about maximising happiness.