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Christmas gifts: Worthwhile tradition or inefficient waste of time and money?

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Thirty years ago this month, a controversial economics paper was released that challenged one of the core traditions of the Christmas season: the giving of gifts. Is it a purely a utilitarian exercise that can be measured in economic efficiency terms to determine if presents are actually worth the money, time, and effort? Or is there more to the practice beyond what can be measured by economic models?

On the whole, American economist Joel Waldfogel determined that it is not worth it—but some economists are willing to make room for some Christmas spirit.

Waldfogel’s famous paper, “The Deadweight Loss of Christmas”, highlights how holiday gift-giving can lead to a loss of economic utility (or what he referred to as “deadweight loss”) due to misallocation of resources and the potential for waste—when, say, there is a gap between how much a gift costs and how much it is valued by the recipient.

This means, then, that as the calendar ticks closer to Christmas Day, those scrambling to find the perfect gifts for loved ones might be economically better off if they exchanged cash instead of gifts, since each individual would be able to spend their money on items they truly value.

Failing to do so renders it more likely that “the gift will leave the recipient worse off than if she had made her own consumption choice with an equal amount of cash,” writes Waldfogel.

Livio Di Matteo, a contributor to The Hub and a professor of economics at Lakehead University, calls Waldfogel’s article a classic, noting its assertion that holiday gift-giving destroys up to one-third of the value of the gifts. This is no small matter, given that in 2022, Canadians spent about $20 billion on gifts, or about $675 per shopper. 

Di Matteo cautions, however, that cash gifts are not necessarily a failsafe against inefficiency. “One might argue that you need to value the utility of the person giving the gift more highly [because he or she gets a benefit in the good feelings of purchasing someone else a gift], in which case the deadweight loss would be reduced or even reversed,” he says. “A pure cash transfer might also come with disutility if the recipient feels it devalues the relationship.” 

Brian Dijkema, vice president of external affairs with Cardus, also praises Waldfogel’s article for its economic thinking and notes that he himself enjoys cash gifts. 

“That’s really helpful and gets to the heart of economics, which is living a frugal life and trying to do the most with your money,” says Dijkema. “But, like most economic thinking, that takes one aspect of life and makes it the totality of the whole thing.” 

He notes that few people live their lives in search of maximum utility, and that there is more to our lives than economizing. “I think Christmas is a classic example of that,” he says. “I’m not Grinch enough to say that there is no meaning in receiving gifts.” 

Dijkema also points out that while Christmas is a Christian holiday at its core, consumer marketing in an increasingly irreligious society has created meaning out of buying material things. 

“I think for some, it has become what you consume, and the pleasure that it gives you, and I actually think it’s not very healthy,” he says. “The question, then, is, when are we getting gifts today, to what end, and why? I think those things are worth considering as much as the actual buying and selling of them.” 

Christopher Ragan, director of the Max Bell School of Public Policy at McGill University, says that in a “cold-hearted economic sense,” holiday gift-giving is very inefficient. 

“The most efficient Christmas gift you can give is generalized purchasing power, which is money. The second-most efficient gift is a gift card, and then all you have to do is make sure that they like where the gift card is from,” he says, pointing out that the time and effort that goes into finding the perceived correct gift is also an inefficiency. 

However, like Di Matteo and Dijkema, he also argues that boiling down holiday gift-giving to economic calculations ignores the intricacies of human relationships—and the spirit of the holiday.

“I suspect that the spirit of Christmas would probably be enhanced if economists did not talk about efficiency on Christmas Day, or [for] two or three days either before and after,” he says. 

Number of Canadians who died while waiting for medical procedures reaches five-year high

News

A new study by a Regina-based think-tank has revealed a concerning trend in Canada’s health-care system—one that could have implications for the ways in which health care is provided to Canadians.

The study, conducted by SecondStreet.org, indicates that in 2022–23, a five-year high of 17,032 patients died while waiting for medical procedures, some of which could have saved lives. 

These findings are derived from information requests made to over 33 health departments, health regions, and hospitals throughout Canada. SecondStreet.org received responses, at least partially, from 12 of these entities, collectively covering almost 75 percent of the Canadian health-care system.

It’s worth noting that the majority of Quebec, Newfoundland and Labrador, as well as Manitoba, were not included in these statistics. Consequently, SecondStreet.org’s estimate of deaths tends to be conservative, suggesting that as many as 31,397 patients may have passed away across the country since 2018.

These patients faced wait times that varied from less than a week to nearly 11 years. 

Colin Craig, SecondStreet.org’s president, is critical of government action on this issue, stating that increased funding alone won’t solve the problem. 

“We have a problem in this country where for 30 years plus, governments have thrown more and more money at the system hoping that things would improve—spending has increased at nearly double the rate of inflation on a per capita basis over the past 30 years,” says Craig. “And yet, the system has gotten worse in terms of outcomes for patients.” 

Despite increased health-care spending, Canada has seen a 64 percent increase in annual surgical waiting-list deaths over the past five years and a 30 percent increase in the last year alone. While several provinces didn’t provide data for the study, SecondStreet.org extrapolated data from across the country to estimate that somewhere in the range of 31,397 patients may have died during the time period in question. 

“How on earth do you not know how many patients are dying because you took too long?” Craig asks. “That’s, I think, something that governments haven’t been questioned on enough, and I think they certainly owe it to Canadians to be reporting on these figures each year.” 

A recent Fraser Institute study revealed that Canadian patients are experiencing their longest-ever-recorded wait times for medical treatment, with a median wait of 27.7 weeks, significantly higher than in 2022 and nearly triple the wait time in 1993. Among provinces, Ontario has the shortest wait time (21.6 weeks), while Nova Scotia has the longest (56.7 weeks). 

“There are several factors that are contributing to this,” says Craig. “One, of course, would be a COVID hangover, but we would stress to Canadians that this was a growing problem well before COVID arrived in Canada.”

Craig notes that Canada’s aging population has resulted in greater demand for health-care services, such as hip replacements, heart-related procedures, and diagnostic scans, and that the system is ill-suited to accommodate this. 

“Our health-care system is not set up in a cost-effective or patient-focused manner,” he says. “All these problems are continuing to impact the services [patients] should receive, and sadly many are dying before it’s their turn.” 

Mackenzie Moir, who co-authored the Fraser Institute study, notes that more than 3 percent of all Canadians are on the waitlist for 1.2 million medical procedures across the country. 

“When we…compare ourselves to our peers, we actually have challenges with the availability of our resources,” he says. 

For context, Moir points out that Canada ranks 28th out of 30 peer countries with universal health-care systems when it comes to physician availability and 26th out of 30 for CT scanners. 

“This type of dearth of resources is going to obviously have an impact on the amount of care that can actually be accessed,” says Moir. 

Craig says that governments have a responsibility to provide health care for patients, especially when a private health-care option does not exist in Canada. 

Christine Van Geyn, litigation director for the Canadian Constitution Foundation, says the high number of patients dying on waitlists has potential constitutional implications when it comes to how health care is delivered in Canada. She refers to Cambie Surgeries Corp. v. British Columbia as an example of a case that raised issues around private health-care options.

Brian Day, a proponent of private health care, served as the spokesperson for a challenge to British Columbia’s Medicare Protection Act (MPA). This act prevented private practitioners, like Day’s Cambie Surgery Centre in Vancouver, from billing patients in the public health-care system. The legal argument asserted that the MPA infringed upon rights under sections 7 (“right to life”) and 15 (“equal protection”) of the Canadian Charter of Rights and Freedom.

In September 2020, following a trial that lasted just over four years, the B.C. Supreme Court rejected the claims. The B.C. Court of Appeal upheld the decision in July 2022, and the Supreme Court of Canada declined to hear an appeal.

“The court found that this prohibition combined with long government wait lists has resulted in not just harm to patient health, but it even results in death,” says Van Geyn. “However, the court found that this prohibition was consistent with the principles of fundamental justice—and the concurring judge found that the prohibition was not consistent with fundamental justice but, shockingly, that a law that resulted in death was justified under section 1 of the Charter.” (Section 1 of the Canadian Charter of Rights and Freedoms permits limitations on Charter rights if they are prescribed by law, reasonable, and demonstrably justified in a free and democratic society.) 

The Canada Health Act does not explicitly ban private health care. While it promotes a publicly funded and administered health-care system—and regulates and ensures access to medically necessary services through that system—it allows for the existence of private health-care services for non-essential medical procedures and services, such as dental care and prescription drugs. 

Van Geyn says patients should keep advocating for changes at the political level, and that provincial legislation can be changed to provide more flexibility for patient choice. 

“Provinces can push the envelope within the system if they have the political courage to try,” she says.