Economist Writing Every Day

The good people at EWED have asked me to recommend a gift for the upcoming holiday season. I know there’s no fewer than three economists that publicly recommend the gift of cash every year. This is ostensibly done in earnest, but really it’s for the LOLs. If we take a slightly more behavioral tact (but only slightly), the optimal gift to give is the thing that people are systematically biased against purchasing for themselves even though it offers a net benefit in exchange. Great. So what are people systematically biased against?

I’d like to suggest people are biased against purchasing things they are a little too good at producing themselves, a sort of “absolute advantage bias”. If you want to give someone a great gift, buy them something they typically produce themselves even though outsourcing it would cost-effectively save them two hours. If you can make manifest in an adult human life two hours of free time you are nothing short of a hero.

Buy them two hours of a cleaning service. Two hours of lawn care. Two hours of babysitting. Two hours of laundry pick up, folding, and drop-off. Two hours of cooking (i.e. a DoorDash gift card). Two hours of car cleaning. Two hours of document proofreading. Two hours of anything that if you recommended it to them they’d shrug their shoulders and sigh “I can’t pay for that when I can just do it myself”.

And it doesn’t matter what they do with the two hours, either – they’ll maximize that with ruthless efficiency. You ever take a two-hour nap on a Sunday afternoon? I defy you to think of anything you can buy an adult for $50 that is better than a two hour nap. I’m getting dreamy-eyed just thinking about it.

Buy the people you love some time for themselves this holiday season. It’s better than cash, it shows you are invested in their well-being, and I’ve never met anyone who couldn’t use it.