The research is clear: Americans are becoming less generous over the holidays. Not to sound too much like a Scrooge, but this is not necessarily a bad thing.
In 1999, Americans said they planned to spend $1,300 (converting to 2020 dollars) on holiday gift giving. In 2020, that amount was about $800. These numbers are based on Gallup data, but retail sales figures show a broadly similar pattern. From 1935 through 2000, gift-giving tended to rise with disposable income. Since 2000, gift-giving has fallen as national disposable income has risen.
In economics lingo, gifts have become an “inferior” good: Their quantity falls as income rises. Other examples of inferior goods include instant noodles or low-quality beans. Now — speaking strictly as an economist, of course — maybe Christmas sweaters and fruitcake should be added to the list.
