Logical Reasoning

PT152 · S4 · Q22 Economist: Gifts of cash or gift cards

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Economist: Gifts of cash or gift cards, which allow the recipient to choose the actual gift, are more highly valued by recipients than are gifts chosen for them by others.

Conclusion

Cash / gift cards are more highly valued by recipients than are gifts chosen for them by others.

Evidence

In a study, people were asked how much they'd pay for a series of gifts that people had bought them, and the average price they said was only about 2/3 the cash price of the gift.

Evaluate

Given That people only said they'd spend 2/3 what their gifts were worth

How Can We Argue That people value gifts given to them by others more than they would the cash equivalent?

We could say that monetary value is only part of "value". What about sentimental value? My daughter might only pay $10 for the $15 penguin stuffed animal that I got her when I was in Patagonia, but that doesn't mean that the penguin I gave my daughter is only worth $10 to her.

As a commodity on the shelf, she thinks it's worth about $10. As a totem of my love for her, she wants to keep it forever.

Similarly, we often buy gifts for people that are more indulgent than what they would spend on themselves. I will only pay about $35 for a bottle of scotch, as will many of my scotch-drinking friends. But if I'm buying a gift for one of them, I'll buy the $50 bottle for them.

Would they pay $50 for that bottle of scotch? No. But would they rather have $50 or the bottle of scotch?

Possibly the bottle of scotch. If they just had the $50, they would spend it frugally. That's not as much fun as someone else spending $50 indulgently in some "Treat yo'self" type way.

Goal

Look for an answer that talks about the more complex ways we evaluate the value of gifts (more than just what we would pay for it). Maybe an answer will provide a story where we would see more value in the overpriced but thoughtful gesture than we would in an equivalent cash gift.

22.

Which one of the following, if true, most seriously weakens the economist's argument?

  1. The rate at which gifts

    Strengthens

    This reinforces the idea that people aren't buying us great gifts (we're returning the gifts more and more), and so it argues in favor of just giving us cash or a gift card instead so that we can' choose our own gift.

    1% picked this

  2. Gifts of cash and gift

    Irrelevant

    It doesn't make any difference what % of gifts are currently cash/gift cards vs. items. If I'm trying to argue that "solar panels are more valuable than wind turbines", it doesn't affect my argument one way or the other which one is currently more prevalent.

    5% picked this

  3. People in the study would

    Unclear Impact

    At first this seems kind of tempting. Granted, the conclusion is just comparing "cash/gift cards vs. things chosen by others". The "others" isn't segregated, so do we really care about gifts from friends/relatives vs. gifts from other people? No, but we kind of like this answer because it seems like the "what about sentimental value" objection we were thinking about. The problem is that this answer choice doesn't control for the fact that friends/relatives are usually going to spend more on our gift than other people would. I might buy a $10 candle for someone I don't really know, whereas I'll buy that $50 bottle of scotch for my brother. The fact that the person I gave the candle to would only pay about $6.70 for it, while my brother would only pay about $35 for the scotch might be all that this answer choice is telling us. In both cases, the author's argument still holds. Since the recipient was only willing to pay 2/3 of what I spent, then wouldn't they have rather just had the cash I spent? If this answer had controlled for the price of the gift, it would have been better: "People in the study would have been willing to pay more for the same gift if it had been chosen by a friend/relative than if had been chosen by others" This would show that there's more to our sense of value than just the object itself. The giver matters, and thus maybe sentimental value is why? But even then it would be a weak objection, because we'd be qualifying the conclusion, "In cases where the gift comes from a friend/relative, we value the gift more than the equivalent cash value." The conclusion is averaging all gifts together in a big lump sum comparison.

    34% picked this

  4. Correct

    People are unwilling to sell

    Why this is right

    This helps us argue that "people value gifts chosen by others more than the cash/card equivalent". After all, doesn't the price they would be willing to sell something for indicate how much value it has to them? If the selling price is 1.5 times the cash equivalent, it sounds like they value it more than if someone were to just offer them the cash. Let's say I buy my cousin a $30 piece of art. In the study, she would have said, "I'd probably only pay $20 for that". But once it's in her possession, she says, "I wouldn't sell that for less than $45." This answer creates a lot of doubt about the completeness of the evidence: apparently how much we would pay for something is not a sufficient metric for how much we value that item. Given that what we would pay for something is less than the actual price, but what we would need to sell it is more than the actual price, it calls the author's conclusion highly into doubt.

    Skill tested: Weaken · how this choice captures the argument's function is the move to repeat next time.

    59% picked this

  5. Most retailers require receipts before

    Irrelevant: receipts

    If anything this strengthens by making it seem like getting a gift that you don't want and then returning it for its cash value or exchanging it for something of equivalent value would be a headache, since we need to have the receipt the gift giver might not have given us.

    1% picked this

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