The Deadweight Loss of Diwali

Using a survey sample of students from a business school in India, we conduct an empirical analysis of different aspects of gift giving on the occasion of Diwali in lines with a similar analysis for Christmas in Waldfogel (1993). Based on simple OLS regression analysis, we find that accessories and electronic goods have higher yield compared to other kinds of gift items. Also, closer the relation and/ or lesser the age difference between the person gifting and the receiver lesser is the deadweight loss. This suggests that these gift givers are more capable of guessing the preferences of the gift receiver than others. We, however, did not find any systematic difference in valuation of gifts by gender of the recipients