Farrell: Would it help the economy to not buy holiday gifts?

The ramped-up sales promotions for BlackFridayWeekendCyberMonday (the four days should be one word) isn't slowing down.

Retailers will push deals and discounts until the holidays are over.

The gift-buying frenzy retailers try to stoke reminds me of writings by economist Joel Waldfogel, professor at the University of Minnesota's Carlson School of Management.

Waldfogel analyzed the "deadweight loss of Christmas" in an article published in the American Economic Review in the early 1990s and in the subsequent book, "Scroogenomics: Why You Shouldn't Buy Presents for the Holidays."

Wait a minute. Not buy gifts! His basic point is that billions are wasted around the holiday season as people buy gifts the receiver doesn't need or want.

Since these gifts are often worth less to the recipient than the money spent on it by the giver, the optimal solution is to give cash. The recipient can then spend the money on what they really want.

Waldfogel's attack on gift-giving spawned a cottage industry of commentary, but not many converts. A survey of economists by the University of Chicago's Initiative on Global Markets found that two-thirds rejected the thesis.

Nobel laureate Angus Deacon noted, "This is the sort of narrow view that rightly gives economics a bad name."

Count me among the skeptics. I love giving gifts. But there are lessons to be drawn from the combination of retailer hype and Waldfogel's thesis.

First, to steer clear of the marketing hype and post-holiday financial regret, set a budget and stick to it.

Second, take the time to think carefully about your gift-giving. The connections gifts celebrate seem more important than normal these days, too. The pandemic is a brutal reminder that what matters is family, friends, colleagues, and others we love and care about. What's valued with gifts is the thought behind them and not the price tag.

What makes for a good gift varies, of course. Perhaps it means shopping to support small businesses and local artisans. Maybe you'll choose gifts that express a sustainability ethic. The labor that goes into handmade gifts is appreciated. A charitable donation is in the holiday spirit.