There's an elf living in Danica Petrella's house who gets up to mischief at night. Sometimes "Tristey," as she calls him, sneaks marshmallows from the cupboards and makes a mess on the counter. Other times, he gets stuck climbing the Christmas tree. One time, the silly guy was caught unrolling the toilet paper in the bathroom.

Danica, almost 3, thinks Tristey's hilarious. And so does her mom, Natalie, who says the little elf has found a new place in her family's Christmas traditions.

Tristey is a stuffed toy who comes as part of a book package called "The Elf on the Shelf." The book has been a wild success in the U.S. since it was self-published in 2005 by a mother-daughter team from Georgia. And it's gaining a following in Canada, thanks in large part to Facebook.

The story of "The Elf on the Shelf" is that the elf is one of Santa's scouts who's asked to watch what goes on during the day in children's houses. Once a family gives their elf a name, his magic powers come alive.

Each night, the elf flies back to the North Pole and gives Santa a rundown of who was naughty and who was nice. He then returns before everyone wakes and positions himself somewhere new. All a parent has to do is move the elf each night after the kids have gone to bed to keep the story going.

Many parents see "Elf on the Shelf" as a great way to fill a glaring plot hole in the whole Santa story: How in the world does Santa keep his lists of good and bad children up-to-date from way up there at the North Pole? And the elf sure can come in handy when kids are acting up.

"Did I just see you steal your brother's toy? Hmmm, I wouldn't do that if I were you. Remember who's watching."

"What's that? You hate my broccoli casserole? I wonder what the elf would think about that."

A tattletale elf who keeps the kids in line? Smart. Selling millions of copies in just a few years? Marketing genius.

Of course, the story comes with a few inherent problems. How long do you keep the ruse up, for example? And what do you say to the kids when they find out the shelf-dwelling elf is a bit of a lie?

Prof. Kang Lee at the Dr. Eric Jackman Institute of Child Study at the University of Toronto has studied a lot about why both parents and children lie. He hadn't heard of "The Elf on the Shelf" before CTVNews.ca wrote to him, but he says it sounds like a creative extension of the Santa story that's been told for generations.

He thinks the elf might be a useful parenting tool "as long as parents are okay with keeping the magic of" it.

"The issue will be that at some point, they must tell the truth to their children about what these magic beings really are and why they pretended they are real. Now, in addition to the usual suspects, they will have to add one more character into their confession," he said in email comments to CTVNews.ca.

Maureen Healy, a child development expert and the author of the upcoming book "Growing Happy Kids: How to Foster Inner Confidence, Success, and Happiness," has mixed feelings.

Healy had always believed that the key to forging happiness in children is to instill them with inner confidence, and to rely less on outside sources of confidence, such as status or wealth. She's not altogether comfortable with compelling children to be "good" through fear of retribution.

"It could certainly facilitate children to be 'well-behaved,' but it's an outward device and there's certainly the potential that the kids are behaving out of fear. And I guess from my standpoint, I would want them to behave out of love," she says.

"You want to teach them a deeper reason why being the best you can be is a good thing," she adds.

That said, Healy says "The Elf on the Shelf" can be used in a spirit of fun and as part of the wonder and magic of the holiday season.

"The good thing about is that it can get the whole family involved. Parents can have fun moving it around every night. The kids are having fun looking for it. That can be great and it's amazing that it's already becoming a new tradition for some families," says Healy.

"As long as you're positioning it as a playful thing, it can be just that."

That's how Natalie Petrella has been using the elf.

"I don't use it for discipline; I use it more for the magic of Christmas," she says.

Because Danica is barely three, much of the concept doesn't work on her; she can barely remember at bedtime what little naughtiness she got up to in the afternoon. For her, the elf is just part of a daily scavenger hunt.

"She wakes up every morning and she goes tearing down the hall to see where he's hiding that day," Petrella says.

Just for fun is how Petrella plans to keep it. She suspects that even a few years from now, Danica will know not to fall for idle threats of coal in her stocking. That's why Petrella doesn't expect she'll ever use the elf as part of her discipline repertoire.

"We discipline her on our own; we don't need an elf to help out with that," says Petrella.

Healy worries that some children might take the elf too seriously and get anxious or a little creeped out by the rather Orwellian idea that someone is watching them and reporting back to higher powers.

Other children might dismiss the elf rather quickly as just a toy and not worry too much about what power it might wield. So parents are still going to need to rely on other ways of teaching good behaviour, she says.

"You'll still need other parenting skills to complement it and make it a positive and effective parenting tool, rather than something that just scares the bejeezus out of kids," she says.

Healy doesn't think the holidays should be about perfection nor should we expect our children to be perfect. She hopes that parents using the elf remind them that they're always loved -- even if the elf catches them being naughty.

"I would want parents who are using the elf to confirm with their kids that while the elf is there and reporting back to Santa, they love them no matter what," she says.