Since Christmas gifts are typically mismatched with the recipients’ preferences, the gift will leave the recipient worse off than if they had made their own consumption choice with an equal amount of cash. For this reason, holiday gift-giving destroys between 10 percent and a third of the value of gifts.

If the results are generalized, a waste of one dollar in ten represents a huge aggregate loss to society. It suggests that in America, where givers spend over $50 billion on Christmas gifts, $5 billion is being lost annually in the process of gift-giving. Add in birthdays, weddings and non-Christian occasions, and the figure would balloon.

From Joel Waldfogel 's 1993 research paper 'The Deadweight Loss of Christmas' which was published in the American Economic Review