Abstract

http://ssrn.com/abstract=337261
 
 

References (25)



 
 

Citations (2)



 


 



Does Consumer Irrationality Trump Consumer Sovereignty? Evidence from Gifts and Own Purchases


Joel Waldfogel


University of Minnesota - Twin Cities - Carlson School of Management; National Bureau of Economic Research (NBER); University of Minnesota - Twin Cities - Department of Economics

October 2002


Abstract:     
Scholars working on the border of economics and psychology have assembled an impressive body of evidence that consumer behavior is not fully rational. As a result some observers (see Kahneman, 1994) question whether consumer choice warrants deference. We address this question by asking whether consumers or others are better situated to make consumption choices. Based on a new survey of both holiday gifts and items consumers purchase for themselves, we present direct evidence that consumers' own purchases generate between 10 and 18 percent more value, per dollar spent, than items received as gifts. Our estimates therefore support economists' faith in consumer sovereignty, place some limit on the reach of the behavioralist critique of economics, and, in addition, confirm the substantial deadweight loss of Christmas.

Number of Pages in PDF File: 26

Keywords: consumer choice, rationality, deadweight loss of Christmas

JEL Classification: D12

working papers series


Download This Paper

Date posted: February 5, 2003  

Suggested Citation

Waldfogel, Joel, Does Consumer Irrationality Trump Consumer Sovereignty? Evidence from Gifts and Own Purchases (October 2002). Available at SSRN: http://ssrn.com/abstract=337261 or http://dx.doi.org/10.2139/ssrn.337261

Contact Information

Joel Waldfogel (Contact Author)
University of Minnesota - Twin Cities - Carlson School of Management ( email )
19th Avenue South
Minneapolis, MN 55455
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
University of Minnesota - Twin Cities - Department of Economics ( email )
271 19th Avenue South
Minneapolis, MN 55455
United States
Feedback to SSRN


Paper statistics
Abstract Views: 3,420
Downloads: 354
Download Rank: 44,864
References:  25
Citations:  2

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.281 seconds