Justin Wolfers speaks with Marketplace on gift-giving
American Public Media's Marketplace spoke with Justin Wolfers for the program's holiday edition of the Freakonomics podcast. In a playful segment about gift-giving, Marketplace asked Wolfers and other economists for advice on choosing that perfect holiday present.
Many gift-givers, Wolfers told Marketplace, actually spend more than they need too.
"They have this thing called the spotlight effect. You tend to think that you're in the spotlight and everyone's looking at you. Applying that to Christmas, it's like you think that everyone's looking at the gift you're about to give and it's super important. And so you put a lot more weight on it, and maybe you spend a little bit too much."
Wolfers suggests spending less on gifts because the recipient will often be just as happy with a less expensive item.
"The person who's about to get the present is going to get dozens of others, and they're probably going to forget about what you're going to give them."