The Economics of Gifts and Giving
Why Economists Study Gifts
Gift-giving moves huge amounts of money and reveals how norms, trust and social ties shape economic behaviour beyond simple buying and selling.
A gift is a transfer without an explicit price. Yet gifts are a large part of household spending, especially around festivals and weddings.
Not a market
Gifts follow social rules of generosity and reciprocity rather than prices.
Size
Festival gifting, wedding gifts and corporate gifts amount to hundreds of thousands of crores of rupees each year in India.
Why it matters
Gifts build relationships, signal status and can distort spending.
A family buys sweets and dry fruits to give to relatives and neighbours at Diwali.
They support whole industries.
- Gifts follow social norms.
- They involve large spending.
- They build relationships.
- Whole industries depend on them.
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