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The Psychology of Christmas Presents

What does your gift say about you - what does theirs say about them?

by Raj Persaud and Adrian Furnham

Scrooge exists and is stalking the corridors of academe. Finance and behaviour experts complain that gift giving at Christmas should not happen, theoretically, because it's highly irrational.

Economists grumble giving cash would actually look after the interests of recipients better, than that pair of socks or the soon abandoned scarf. If we really cared most efficiently for those around us, we should give money. Tore Ellingsen and Magnus Johannesson from the Stockholm School of Economics, in a recent paper entitled 'Conspicuous Generosity' list the reasons it's more efficient and rational to unwrap cheques on Christmas morning.

Raj Persaud
Source: Raj Persaud

Firstly, buying gifts runs the risk of purchasing something the recipient doesn't want and therefore won't value; currency allows them to get exactly what they desired. Secondly, presents consume an enormous amount of time, and other resources, being tracked down. Cash giving saves incalculable time, stress and the polar ice caps.

Joel Waldfogel, a Professor of Applied Economics at the Carlson School of Management, University of Minnesota, showed from large surveys of those receiving gifts, that when asked what cash sum they would take if offered money, instead of the gift they actually got, recipients were on average willing to accept a sum significantly less than what the gift was actually worth. In spending billions across the planet buying someone a present, the world is wasting significant resources. A high price to pay for sentiment.

During this season charity fund raisers actively appeal for the disadvantaged. They almost universally don't ask for presents - much preferring you donate cash - because this is pragmatically the most useful contribution you could make. If it's obviously more helpful than other gifts in the domain of charity, so economists remain perplexed as to the irrational paradox of continuing to buy each other 'suboptimal' presents?

Tore Ellingsen and Magnus Johannesson propose in their recent paper published in the 'Journal of Public Economics' there are various reasons we don't give money. Money has unpleasant associations, including selfishness; various psychology experiments demonstrate that the mere presence of money or even if it's presented subliminally below conscious awareness, seems to drive people towards behaving inconsiderately. Similar experiments indicate people are more generous when they have the chance only to give time, than when they have the opportunity simply to donate money.

Gifts are really about signalling your regard for the other, and this explains why almost universally presents that take time and effort are preferred to those that cost a lot. One argument against cash becoming the mode of exchange on Christmas, is that it would be too easy to fake relationships by simply writing a large cheque. People intuitively know this - they prefer the better test of how much they are cared for, which is the inconvenience of locating and bringing a proper present. Those who are too bowled over by easy largesse might be demonstrating deep down insecurity - is it any accident that it's the mistress rather than the wife who usually gets the more glamorous present?

Females are disproportionately active as Christmas gift givers, giving 84% of all gifts, and receiving only 61%, confirming what psychologists have long suspected - they shoulder the main burden of relationship maintenance. Women divide their gifts equally between males and females. Male givers without female "collaborators" are relatively rare (16%) and most of their gifts are given to females. Gifts from males to males are rare (4%) compared to gifts from females to females (17%). Women are much more active gift givers than men at Christmas, tending to select the gift if part of joint giving, and giving more gifts singly.

Raj Persaud
Source: Raj Persaud

There are also never likely to ever be bundles of cash waiting under the Christmas Tree, because if the exchange of money became the norm, it might be relationships would deteriorate. In this new more rational and efficient universe where currency is king on Christmas Day, how confident could we be of being appreciated for ourselves, as opposed to the size of our wallets? There becomes a kind of charm to the 'sub-optimal' nature of many presents - Ellingsen and Johannesson cite economists who argue offerings with low 'user value' indeed prevent people from entering relationships simply in order to collect gifts.

Ellingsen and Johannesson quote a recent field experiment from Economist Sebastian Kube of the University of Bonn, and colleagues Michel André Maréchal and Clemens Puppe, where workers individually hired for a job were given unanticipated gifts by the employer, some monetary and others non-monetary. The value of the non-monetary gift was known to the subjects and identical to the monetary gift. The cash gift was preferred, yet the non-monetary gift was considered a more credible signal of kindness. Workers' subsequent performance responded only weakly to cash gifts, but positively and strongly to the non-monetary gift.

It's vital to remember during this season when gift-giving is the norm, the psychological power of the unexpected gift during the rest of the year.

Raj Persaud
Source: Raj Persaud

Ellingsen and Johannesson suggest why few ask for cash, although the research suggests most would frequently prefer it, is no one wants to appear driven by money. Presents are therefore all about what lies behind the wrapping; the true exchange is regard, and is indeed therefore fundamentally psychological. Every present reveals something about what the giver thinks of the recipient.

Ellingsen and Johannesson quote a song lyric, 'A man has two reasons for the things that he does. The first one is pride and the second one is love' by Hüsker Dü from the song 'She Floated Away' on the album 'Warehouse: Songs and Stories'.

It would seem the more you give and receive with love, and perhaps the less with pride, the better your Christmas might be.

A gift is the outward manifestation of understanding. A perfect gift is what the recipient really wants, enjoys and appreciates, and would not buy for themselves.

Merry Christmas everybody, and please don't over-analyse everything.

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Raj Persaud and Peter Bruggen are joint podcast editors for the Royal College of Psychiatrists and also now have a free app on iTunes and Google Play store entitled ‘Raj Persaud in conversation’, which includes a lot of free information on the latest research findings in mental health, plus interviews with top experts from around the world.

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Dr Raj Persaud's new novel - a psychological thriller which poses the question - 'is love the most dangerous emotion?' - is based on a unique police unit that really does protect Buckingham Palace from fixated obsessives - 'Can't Get You Out Of My Head' - and is now available to order on line.

A version of this article was originally published in The Huffington Post