Christmas Stockings Could Be Lighter, but Who Cares?

This holiday season, some consumers are cutting back—but one economist argues that holiday spending is a waste anyway.

Almost a third of 2,300 adults polled in September plan to spend less on holiday purchases this year than in 2008, according to Burst Media’s holiday spending outlook. The survey found that more than half (63%) of consumers plan to spend the same or cut back on holiday purchases, and only about 15%  plan to spend more.

While households of all incomes are reining in spending, households with incomes of $35,000 to $75,000 are cutting back the most (46%). Women plan to be more frugal than men, with 38% planning to spend less on gifts and entertainment, compared to 27% of men, according to the survey from Burst Media, a provider of advertising representation, services, and technology to independent Web publishers.

While less holiday spending could be viewed as bad for the economy, one economist might argue that holiday purchases are a throwaway anyway. In the new book “Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays,” author Joel Waldfogel argues that holiday consumer spending just generates vast amounts of economic waste to the tune of $5 billion each year.

When’s the last time you received clothes a Christmas present you never wore? Waldfogel contends that holiday spenders often give gifts the recipient doesn’t want. People are more satisfied when they shop for themselves. Furthermore, gift-givers might max out their credit cards to give gifts that leave the receiver less than satisfied, creating a “deadweight loss.”

So, perhaps those who are cutting back on gifts this year shouldn’t feel so bad.