What did you get for Christmas? A stack of unwanted gifts worth far less to you than the giver paid for them?

If so, you are not alone, at least according to economist Joel Waldfogel, who conducted a now-classic study of seasonal gift giving. Waldfogel asked his participants (Yale students) to estimate the total price paid for the Christmas gifts they received and – not counting any sentimental value – the minimum amount of cash that they would have been just as happy to receive instead of each gift. The average total for the actual gift came in at $509. The cash total came in at $462, suggesting that gift-giving “wastes” around 13% of value. Now, despite publishing a book called Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays, Waldfogel isn’t made entirely of stone, and acknowledges that “the giver may derive some utility…which he would not derive from giving cash”. Translated from economist-speak, this means something like “You don’t get a warm fuzzy feeling from handing over an envelope (much less, doing an online banking transaction)”.

That said, givers seem to be aware of the degree to which their gifts are likely to miss the mark. Perhaps unsurprisingly, grandparents are the worst gift-buyers, with their gifts wasting on average around 40% of their value. Consequently, almost half the time, grandparents choose to give cash or gift certificates instead. On the (significant) other hand, partners’ gifts waste only around 8% of their value, with none of those surveyed giving cash or gift certificates instead (can you imagine?).

Happily for those who are uncomfortable with Scroogenomics, subsequent research has challenged Waldfogel’s findings. A study that included, alongside Harvard staff and students, regular Bostonians found that the average value placed on gifts received was more than double the estimated purchase price. How is this possible? When questioned afterwards, participants frequently said that the gift was something that they wanted, but felt that they shouldn’t spend their own money on, or simply never got around to buying.

But talk is cheap. Rather than simply asking people how much they would be happy to receive in lieu of their gifts, the authors of a third study conducted a real-life auction, in which recipients sold their Christmas gifts to the experimenters. According to these findings, the average participant valued her gifts at about a quarter more than their estimated purchase price. A limitation of this study is that the type of auction used (called a random nth price auction) meant that very high value gifts – one participant had received a new car –  had very little chance of actually being sold; a fact of which the sellers were aware. On the plus side, this type of auction was chosen precisely because it minimizes strategic bidding, and so yields very accurate bids – in this case, offered selling prices – for all but the highest value items. Incidentally, all that the experimenters ending up purchasing was a pair of tights, a pair of slippers and what they described as a “beer intake facilitator” (I’m guessing one of those hats with can-holders and long straws), each for just $2.

So where does this leave us? Next year, should you just give cash instead? Probably not. Whatever method is used, there are a few factors that these cold hard economic analyses just don’t capture. First, as even Waldfogel admits, there’s quite a stigma attached to giving cash, and paying a small “fine” to avoid it (around 13% on his calculations) sounds like pretty good value to me. Second, all of these studies assume a kind of “three wise men” scenario, where the giver just turns up with something that he hopes the recipient will like. In my experience, many Christmas gifts have been requested more or less directly. Third, many relatively cheap gifts – for example, a homemade calendar featuring photographs of the grandchildren – are not things that the recipient could otherwise just go out and buy. Finally, while these studies looked only at adults, Christmas is – for most people – all about young children, who would hardly choose a wad of cash over a big shiny package left under the tree by Santa Claus.

Now, if you’ll excuse me, I need to head out to the January sales; I have a bunch of unwanted gifts to exchange.