Everyone knows the old adage oft-repeated in this gift-giving time of the year: It’s the thought that counts. Recent studies by researchers at Stanford may have found hard evidence that this old saying is true.

Though gift givers assume that more expensive gifts will be appreciated more by the recipients, this is not necessarily true, according to a recent study conducted by two investigators from the Stanford Graduate School of Business. In one example, the researchers examined the giving and receiving of engagement rings. The more men spent on an engagement ring, the more they thought the rings they had bought were appreciated by their fiances. Fiances, however, report that they were more appreciative of the more expensive rings.

“This shows that men shouldn’t feel bad if they can’t afford to buy the ring they really want,” says Frank Flynn, associate professor of organizational behavior at the Stanford Graduate School of Business and a co-researcher on the study. “The fact that the thought counts more than the price tag is important for people to realize, especially in these challenging economic times when people are really strapped for cash.”

Expensive Presents: Are They Worth It?
Expensive Presents: Are They Worth It?

So will everyone be ditching the iPods, cashmere and other common high-end gifts this year and replacing them with home-made cards and Penne necklaces? According the behavioral economics literature, consumers will likely continue the behavior they exhibited in the study, and continue to purchase gifts for more than recipients value them.

But if you are looking for a last-minute gift this year and are strapped for cash in these hard economic times, take some solace in the fact that smaller gestures and less expensive gifts may be more meaningful than an outrageously excessive purchase.

“You simply don’t have to spend that extra hundred dollars to get the same level of appreciation for a gift,” observes co-researcher Gabrielle Adams, a doctoral student in organizational behavior at the Business School.

For ideas on home-made gift ideas that you can give this holiday season, head to the Five Cent Nickel.