The Case for Stamps

I'm of the somewhat Grinchian cast of mind that does things like worry about the deadweight loss of Christmas every time to so-called "Holiday Season" comes around. To make a long story short, if two people each buy each other a gift worth $100 the odds are that both will wind up worse off than if they'd just spent the $100 on themselves. But try explaining this thinking to loved ones and you'll probably wind up worse off than if you'd just spent the $100. Tyler Cowen is working toward a solution:

Buy someone a book of stamps. It has the efficiency properties of a cash transfer (who doesn't need stamps?), yet if you choose an attractive issue it will show (a little) more thought than money alone. And hey -- you had to stand in line to get it, or endure their ugly web site, and at a monopolistic institution at that.

There you have it: Stamps, the efficiency-minded person's Christmas gift. I suppose farecards at your local mass transit authority also have some of the same properties (speaking of which, I actually need a new SmarTrip Card if anyone's looking to buy me something...) so consider that as well.

Photo by Flickr user threlkelded used under a Creative Commons license

Comments

Who needs stamps nowadays? Very occasionally, I use them, but only if there isn't a way to pay a bill online correspond via email.

Stamps are so 20th century.

Posted by Misplaced Patriot | November 18, 2007 1:39 PM

This post is Exhibit A of why the world would be better off if no one took Econ 101.

Posted by John DE | November 18, 2007 1:41 PM

Who needs stamps nowadays?

Indeed. I use two or three stamps a year.

Posted by ogged | November 18, 2007 1:42 PM

I'm thinking of giving everyone hatchets for all future gift-giving occasions.

Posted by TJ | November 18, 2007 1:44 PM

Yes. I generally don't manage to go through a book of stamps before the postage rates change. I guess the "forever" stamps will fix that problem, but still it doesn't seem like a good gift. I'd have thought it would be even more true for you whippersnappers.

Posted by KCinDC | November 18, 2007 1:45 PM

I hate to shop! A couple years back I purchased several handmade stamp dispensers (for a coil of stamps) at a art/craft street fair. I then purchased several coils of one hundred stamps and inserted them into the stamp dispensers. Easy to wrap-use a gift pouch or box. Easy and inexpensive to ship. This year it's books for everyone. Already ordered online and gift wrapped by the seller. I hate to shop. Bah Humbug!

Posted by I've done this plus... | November 18, 2007 1:46 PM

I hate to shop! A couple years back I purchased several handmade stamp dispensers (for a coil of stamps) at an art/craft street fair. I then purchased several coils of one hundred stamps and inserted them into the stamp dispensers. Easy to wrap-use a gift pouch or box. Easy and inexpensive to ship. This year it's books for everyone. Already ordered online and gift wrapped by the seller. I hate to shop. Bah Humbug!

Posted by I've done this plus... | November 18, 2007 1:47 PM

To make a long story short, if two people each buy each other a gift worth $100 the odds are that both will wind up worse off than if they'd just spent the $100 on themselves.

Indeed, because the view that "It's the thought that counts" is clearly held only by economic illiterates who don't realize that thoughts per se have no value and can't be counted at all.

Posted by RSA | November 18, 2007 1:48 PM

People still use stamps? Maybe I'm in the minority, but I only use a couple of stamps a year. All my banking and bill-paying is done online, and I haven't written a letter in a long time.

Also, who's going to unwrap a book of stamps and say "Wow! Just what I was hoping for." A good refundable gift certificate for a local business makes for a much better gift with equal (if not greater) utility/value.

Posted by Ben | November 18, 2007 1:54 PM

Oh, come on. In line with RSA's comment, see ch. 6 of Tim Scanlon's What We Owe To Each Other, c. p. 252, on the "representative" value of choice:

On our anniversary, I want not only to have a present for my wife, but also to have chosen that present myself. This is not because I think that I am more likely to come up with a present she will like (as far as that goes it would be better to have her choose the present herself). The reason is rather that the gift has a different meaning if I choose it myself—both the fact that I chose it and the choice that I make reflect my thoughts about her and about the occasion.

Posted by Anonymous Phil Grad Student | November 18, 2007 2:11 PM

Boo, terrible idea. Who still uses stamps?

Posted by es | November 18, 2007 2:20 PM

Or, Matt, you could embrace Judaism, and stop celebrating Christmas. Aren't Hanukkah presents all just cheesy little trinkets of no monetary value?

Posted by Bill | November 18, 2007 2:31 PM

"And hey -- you had to stand in line to get it"

thereby reinstating the dead-loss you were trying to avoid.

an economist who values his line-standing time at zero?

i mean--zero is the value that *i* place on economists' time.
but then i'm not an economist.

Posted by kid bitzer | November 18, 2007 2:38 PM

Wow, this works with a lot of things. Toilet paper and toothpaste for two. Thanks, Matt, it's a Festivus miracle!

Posted by primigenius | November 18, 2007 2:39 PM

Well if you do go the stamps route, make your own personalized rolls. http://photo.stamps.com/Store/?source=si10985886

I've read that stamps with pictures of Hitler and the Unabomber have been rejected already. But if one didn't go quite that far down the evil scale, surely you could send out a roll of stamps honoring Tom Delay or Hugo Chavez.

Posted by beowulf | November 18, 2007 2:48 PM

And instead of giving other countries tangible or substantive forms of aid -- rebuilding their power grids, training their bureaucrats and teachers, instituting best-practice anti-HIV programs -- we should just hand them piles of cash to use as they see fit.

Wait! Now I understand why we handed Pakistan $10 billion in unmarked bills! It was to avoid deadweight loss.

Posted by brooksfoe | November 18, 2007 2:55 PM

This is true only where there's an equal nature to gift giving- & there not giving gifts makes sense; we could start saving as the economists are telling us that we should do as a nation; oh, wait, we do that & the same folks will start worrying about a bad retail season at Christmas throwing us into a recession. In any case, gift giving is generally unequal and reflects the desire of the gift giver to influence the recipient, or the power relationship between the two.

Posted by Eric | November 18, 2007 3:02 PM

What's the advantage of stamps over a gift card?

Posted by Al | November 18, 2007 3:20 PM

Also, I'd love to know what happens when Matthew gives his girlfriend her gift and she opens it to find... stamps.

Although, perhaps this post is a way of telling her, hey honey, don't be expecting any romantic gift from me this season.

Posted by Al | November 18, 2007 3:23 PM

It seems like whenever I get a bit freshly baffled over how the country got into htis mess, along comes Tyler Cowen to remind me - it's because people who think that way get to influence the decision-making of religious maniacs and authoritarians.

The spread of neat online shopping opportunities has led to a new pattern of gift giving among my friends and me. We choose some gifts that we have good reason to believe the recipients will like, and give some gift credit for the iTunes store, or Powells.com, or eMusic.com, or some other place that's fun to browse for rarities. So there's something to open and look at and think "yay! they chose a neat thing for me!", and some credit to use in searching things they didn't know you'd like, so that you can tell them later, "yay! thanks to you, I have X, which I've been wanting forever!" Suits us, anyway.

Posted by Bruce Baugh | November 18, 2007 3:29 PM

It has the efficiency properties of a cash transfer (who doesn't need stamps?)

I thought that was the argument for beer as a gift, right?

If this post was titled, "The Case for Beer" - I'd be with you.

Posted by SoCalJustice | November 18, 2007 3:32 PM

Oh, and just to join the chorus: in 2006, I used eight stamps. So far this year I've used six.

This is something I notice essentially every time Tyler takes up a social topic. It's not just that his interpretations start from what I think is a fundamentally broken view of humanity. It's that his basic facts are wrong. He has no idea how people live or what interests them. Whether it's the length of books or the number of stamps, he's just plain wrong again and again, so reliably that it's safe to assume any claim he makes about others' practices and preferences is wrong unless well-documened by links to people who aren't in the same hive mind.

Posted by Bruce Baugh | November 18, 2007 3:33 PM

At least a gift card involves some form of thoughtfulness based on the likeliness of a person shopping there.
Seriously, stamps? Transit tickets, yes. Laundry detergent, razorblades, deoderant, soap, imperishable groceries, lightbulbs, I guess. Those are some utilitarian gifts.
Anyway, as the Moral Panicker, it is my duty to rally to the defense of the December spendathon from Yglesias. Could it be that some people value knowing that somebody else thinks highly enough of them either to guess reasonably their gift preferences (which may be utilitarian) or at least to ask about those preferences? Could it be that the validation of a personal relationship in the context of a widely practiced social event is not entirely unreasonable and is related to a desire to discover one's location in society? Of course it isn't when you can get paid to free-associate on the Internet about how much wiser and more moral you are than everybody else on the planet. What is the use of the thoguhts of small people trying to find themselves in late-capitalism when you have found yourself a delightful New Media sinecure of judgmental know-nothingism?

Posted by Moral Panicker | November 18, 2007 3:45 PM

SoCal Justice: Seriously, something to eat or drink that I know the recipient likes but tends not to get for themselves can make a great gift. I have a friend who absolutely loves Jones Sodas, but is living in a smallish town that doesn't have any stores that stock a lot of their flavors. I think several of us are planning to chip him and get him a mixed case of the exotic flavors that make him happiest. Sometimes friends have gotten me expensive baked goods or other foods fixed entirely free of a bunch of the common ingredients I'm allergic to, and I love it each time - they're thinking of my happiness, and it works.

Beats stamps.

Posted by Bruce Baugh | November 18, 2007 4:00 PM

Estimated taxes, absentee ballot applications, rebates that require a UPC, birthday cards to relatives who don't have/wouldn't appreciate e-mail. .. I don't use a ton of stamps, but I use some. A book of stamps, though, is what, 8.20? Admittedly, that's not much of a gift.

Posted by Habitante | November 18, 2007 4:11 PM

This is part of the radical liberal leftist war on xmas, right?

Posted by George | November 18, 2007 4:24 PM

I found the perfect holiday gift and it's only 20 bucks.

Posted by eRobin | November 18, 2007 4:27 PM

I screwed up that link - it's here.

Posted by eRobin | November 18, 2007 4:29 PM

I think this misses the point of the gift. The point of the gift is to show other people that you've paid enough attention to them to get a thoughtful gift. Hence even if it doesn't provide the maximum functional utility it reinforces feelings of affection.

Posted by Charlie | November 18, 2007 4:45 PM

Matt

the dead-weight loss of Xmas has nothing to do with economics but with religion?

Posted by Hugo Pottisch | November 18, 2007 5:31 PM

Stamps are better than gift cards because the Post Office must honor them at face value. You take $100 of stamps to the Post Office , you get $100 in cash.

Posted by Rob | November 18, 2007 10:15 PM

Well, suppose a and b are two goods. Suppose U(a) < U(b). Let us also suppose that U(purchasing something for yourself) < U(receiving a kind, thoughtful gift from a loved one). One might reasonably infer from this that U(purchasing a for yourself) < U(purchasing b for yourself), and that U(receiving a as a loving gift) < U(receiving b as a loving gift). A fortiori, U(purchasing a for yourself) < U(receiving b as a loving gift). However, I don't see a way to establish an ordinal relationship between U(receiving a as a loving gift) and U(purchasing b for yourself). It would be better if people gave gifts and those gifts were always the "right" ones. The fact that they aren't always the right ones, though, doesn't indicate that having everyone buy something for themselves rather than spending money on gifts for others would be less efficient than the actual status quo, which involves a mixture of losses from bad gift choices and gains from the experience of gift exchange, love, friendship, etc.

Posted by Julian Elson | November 18, 2007 11:46 PM

Coffee coupons are good gifts. They have them at Starbucks and Dunkin' Donuts. I would guess people spend more on coffee than postage in a given year.

Posted by joejoejoe | November 19, 2007 12:33 AM

Except for those of us who don't drink coffee. I got a $5.00 Starbucks gift card sometime in 2006 for filling out a parking survey at work, and I still haven't used it up yet. Back in March I was driving through Utah and bought a pastry with about half of the card, so it hasn't gone completely to waste.

Posted by Adam Villani | November 19, 2007 1:58 AM

Adam Villani - It's the thought that counts.

Posted by Santa Claus | November 19, 2007 4:25 AM

What Charlie said. The point of presents isn't the gift. It's that the choice of gift demonstrates you understand the recipient well and care enough about them to make an effort.

Posted by Ginger Yellow | November 20, 2007 8:21 AM

You need a NEW SmarTrip card? Didja lose it?

Posted by Angry Sam | November 20, 2007 12:41 PM

Give a life-saving anti-malarial bed net for $10.

www.nothingbutnets.org

Give the gift of livestock.

www.heiferintl.org
www.oxfamamericaunwrapped.org

Make a micro-loan to a small entrepreneur in a developing nation.

www.kiva.org

Posted by bob | November 27, 2007 10:06 PM