History

Way way back, before the industrial revolution, did giving gifts mean a lot more than it does now? You see most of the people were poor, small things like a comb seemed like a luxury to them.

So as a result, gifts held a lot of significance for these people. Unlike our modern-day gift giving traditions where we often buy something because social norms and easy availability force us.

However, some traces of this behaviour could be traced back to the time when people couldn’t afford combs, yet the aristocracy used to give unique gifts as a token of love.

Why Do We Give Gifts?

Firstly, affection. It is only natural to shower the person of your love interest with gifts. Common amorous gifts were often aphrodisiacs.

Then there were the gifts you give someone when you attend a gathering hosted by them. Common examples are weddings gifts, birthday gifts, basically gifts for any occasion of celebration.

Thirdly and most importantly, for influence. Even today it is common for people to use gifts to exchange socio-political influence. Eg: The Statue of Liberty was a gift to America from France to establish their alliance. On a micro scale, people try to buy somebody’s loyalty with gifts, or maybe, the gift is a token of appreciation for the loyalty shown.

Disaster Of Not Knowing The Other Person

We live in an era where everything is hyper-connected to everything else. In fact, Bill Gates thinks that in the case of an epidemic like the Black Plague, due to this connectivity the virus would destroy half the global population in three months. Since we are a part of society and we affect everything around us, we should know about the economic impact we have on the values of items we purchase.

Economic value is the price or amount an individual who owns the item is willing to pay for it. Whenever buying something we always know how much we are willing to pay for something and so we can make profitable decisions. However, according to Economist Joel Waldfogel from the University of Minnesota,  we might depreciate the value of a good by the process of gift giving.

For example, you like a girl and get her a mug as her Christmas gift. Let’s assume you paid X amount for the mug. Let’s say she likes the gift you got for her and was willing to pay twice as much for the same mug; you just created a value for the product. However, in most cases, we do not know how much one is willing to pay for a present, and this often leads to the destruction of value. 

So the point is that whether it is out of love or influence, we need to have a deeper and more intimate understanding of the person we are offering this gift to; make sure that your feelings are translated with a unique gift. It will not only strengthen the bond you share, but you will also be creating the value of a product and thus earning a profit.

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