Present(s) simple?

How are you doing with your Christmas shopping? Did you already have all the presents you needed by the end of July? Or are you like me who normally leaves everything to the last minute?

Whatever your timetable, I have a tip on how to go about buying presents for your friends and relatives. This tip consists of just one word: don't! That's right: don't buy any presents at all.

This might sound a bit mean. And some of you will no doubt be thinking that this is the sort of stupid idea that only an economist could come up with. Well, I've got news for you: you're right.

In his book Scroogenomics, economist Joel Waldfogel, a professor at the Wharton School of the University of Pennsylvania, argues that Christmas presents destroy billions of dollars (or euros) of economic value each year.

Waldfogel's book is named after Ebenezer Scrooge, a character In Charles Dickens's 1843 story, A Christmas Carol . At the start of the novel, Scrooge is a miserable, tight-fisted man who hates Christmas and anything that makes people happy.

So why does Waldfogel think that Christmas presents destroy value? He gives a simple example. Imagine that your Aunt Bea buys you an ugly orange teapot for $50. You yourself, wouldn't have paid more than $10 for it.

In other words, the act of buying you this teapot has destroyed $40 of economic value. Added up across all the Christmas presents bought each year, this amounts to billions of lost value, known as "deadweight loss".

The point is that most people who buy presents don't know exactly what value the receiver would put on a particular item. And the less well they know the other person, the more value they destroy by buying presents.

So what's the solution? There are various possibilities. One is giving money, although that's frowned on in some cultures. Another possibility is vouchers, although these don't always get spent.

Waldfogel's recommendation is to donate money to charity in the name of the receiver. On the other hand, he would no doubt be happy if you bought his book as a present for your friends and relatives, including Aunt Bea.