Many people fall into the trap of thinking that if they spend more on a gift, it will be appreciated more. People who buy an expensive gift consistently overestimate how much the gift will be appreciated by the recipient. However, if you ask the recipients, their reactions to more expensive gifts were not significantly stronger than to cheaper gifts. This even applies to engagement rings where the size of the stone is a simple indication of the value of the gift.
This mental shortcut between money spent and perceived value leads people to overspend on gifts. A common way to deal with this is for families to set a limit on the amount they can spend on gifts. But this can be counterproductive. People handle budgets differently, whether they are buying a gift or something for their own use. When buying things for themselves, budgets work because people try not only to stay on budget, but also under budget, in order to get that warm feeling that they have saved some money.
But when people buy a gift, the old “more money equals higher value” shortcut kicks in and people try to maximize their spending within budget limits. The result is that people are willing to spend more money on the same things if you buy them as gifts on a budget than if you buy them as a gift without having a budget.
Willingness to pay for socks
Source: Choe et al. (2023)
If you’re like me, you hate wrapping gifts because you have two left hands, and it always looks like the dog helped wrap the gift when it’s done. What could be better than having a gift professionally wrapped. Better yet, why not go overboard with the packaging to show how much care you put into choosing the gift? Gift givers tend to use elaborate packaging as a signal to the recipient of how much effort they put into selecting the gift.
Apparently this is completely counterproductive. People who receive elaborately wrapped gifts tend to suspect that the gift giver has put more effort into viewing the packaging as an otherwise thoughtless gift or a gift of low value. The difference in perception is especially pronounced on occasions where gift giving is customary, such as birthdays and Christmas, and when the gift giver and recipient are not closely related. It’s better to have an average gift box or wrap it by hand than to go overboard with the packaging.
It is now common knowledge that people value experiences more than things. This experiential benefit is now well documented in psychological research. Interestingly, however, the closer the relationship between the giver and the receiver the more likely it is that the giver will choose an experiential gift over a material gift. This is likely because the giver and recipient of the gift are more likely to do things together and gain positive memories from the gift.
The chance to choose an experience gift depending on social proximity
Source: Yang et al. (2021)
An advantage of experiential gifts is that they last longer. They ensure that the recipient will later remember the gift giver when he or she enjoys the experience. I’ve written a post before about how the best gifts that make us happiest are those that combine material happiness with experiential happiness (like a swimming pool).
Highest Luck Items
Source: Weingarten et al. (2023)
However, when you ask people who buy gifts for others how they choose the gift, they tend to emphasize the following moment of giving the gift. That is why people opt for gifts with a ‘wow factor’ or for novelties that surprise the recipient. That’s the equivalent of the sugar rush we get after eating ice cream. The better gifts are the ones that can be used for a long time. A coffee maker will probably be appreciated for longer then a painting. Just don’t try to buy something that is a novelty and can be used for a long time, like a cuckoo clock for example…
Speaking of works of art as gifts, many people are reluctant to buy someone a sentimental gift, such as a framed family photo or an object that reminds them of a past vacation, etc. This is a mistake because it prevents them from making some of the best gifts possible. Research has shown that the recipient of a gift rates it much higher if it has sentimental value, in part because it is highly personal and reflects well on the thought and care the gift giver has put into choosing the gift. Moreover, sentimental gifts make people happy longer.
Sentimental gifts make people happier longer
Source: Yang and Galak (2015). Note: SV = Sentimental value.
How boring is it to ask someone what they want for Christmas and then buy it for them. That’s the antithesis of a thoughtful gift. But think about it this way: at least the person gets something that you’re sure she’ll like (and usually it’s a “she” who has to give her partner an idea of ​​what to buy for Christmas).
Francesca Gino and Francis Flynn showed in a series of experiments that donors tend to value solicited gifts less or at best the same as unsolicited gifts. But unsolicited gifts are often gifts that are not appreciated by the recipient. The result is that the recipient of a gift, on average, values ​​a requested gift more than an unsolicited gift.
Strangely enough, if the list of items requested is shorter, the gift giver tends to appreciate the requested gift more, because he (and I repeat, it is usually a “he”) knows that the gift will be appreciated. The recipient, on the other hand, does not appreciate a requested gift less because it may be the only gift on the wish list…
Appreciation of solicited and unsolicited gifts
Source: Gino and Flynn (2011).
And finally, as I write this before Christmas, don’t just give gifts to your loved ones on special occasions like Christmas, birthdays, or wedding anniversaries (note to spouses: wedding anniversaries are important; don’t forget them).
Gifts given outside of special occasions are unexpected and indicate a much greater degree of care and attention on the part of the recipient. And since these notes are generally about economics, think about this result a survey of random gifts: A $5 Amazon gift card on any given Tuesday has the happiness equivalent of a $50 Amazon gift card on a birthday.
#Christmas #Edition #EvidenceBased #Gift #Giving