Published by Adrian Vogel · Reading time: approx. 4 minutes
You are standing in the basement holding a box nobody has opened in years. Throw it out? It feels wrong. Behind that feeling sits the endowment effect: we value an object more highly the moment it belongs to us – the very same object we would barely notice as strangers. That effect explains a large part of why letting go is so hard. Here is what the research knows about it, why counting helps when you clear things out, and why we look away precisely when things get uncomfortable.
The Short Version
The economist Richard Thaler coined the term endowment effect in 1980. It says something quite simple: mine is worth more than yours – even when it is the same thing. Your old record player is worth more to you than to any stranger. Not because of its market price, but because it is yours. That is not a weakness but a well-documented pattern. And once you know it, you can work around it.
The Mug Experiment and What It Says About Your Basement
The classic study comes from Daniel Kahneman, Jack Knetsch and Richard Thaler (1990). At Cornell University, half the students were given a coffee mug from the campus shop, the other half were not. Then they were allowed to trade. In theory, roughly half the mugs should have changed hands. Hardly any did: the owners wanted about twice what the others were willing to pay. And these were mugs that had been handed out at random minutes earlier. Nobody had any reason to think their particular mug was special. Simply owning it was enough.
Now imagine how strongly this works on things with a history – your father's tools, your collection, the crockery from your first flat. Other patterns pile on top: losses hurt more than equivalent gains please (Kahneman & Tversky, 1979). What we once invested, we do not want to "waste" (Arkes & Blumer, 1985). And Russell Belk (1988) described how we experience our possessions as part of ourselves. Parting with them then feels like losing a small piece of us.
In fairness: the effect is not entirely uncontested. Plott and Zeiler (2005) showed that the experimental setup explains part of the gap. That does not change the core of it: ownership changes how we value things.
Why Counting Helps
If ownership makes letting go hard – what makes it easier? One answer comes from a car wash. Joseph Nunes and Xavier Drèze (2006) handed out loyalty cards there. One group got eight empty squares. The other got ten squares, two of them already stamped. Both groups needed eight washes. Even so, 34 per cent of the group with the free head start redeemed their card, compared with only 19 per cent of the other. Visible progress alone was enough to keep people going.
The goal-gradient effect fits alongside it: the closer the goal, the harder we try (Kivetz, Urminsky & Zheng, 2006). Applied to the basement – as an obvious analogy, not as a study about tidying up – it means this: people who can see the pile shrinking carry on. A list to tick off, a counter dropping from 40 boxes to 12, an inventory that grows. Every visible step makes the next one easier.
The Ostrich Effect: Why We Look Away Exactly Then
Do you know the feeling of preferring to leave the basement door shut? It has a name: the ostrich effect (Galai & Sade, 2006). We avoid information that might hurt. Karlsson, Loewenstein and Seppi (2009) demonstrated it with investors: when markets rise, they check their portfolios more often – when markets fall, less often. A follow-up study using data from more than a million investors confirmed it (Sicherman et al., 2016): after market declines, logins dropped by almost ten per cent.
Applied to the basement – and this is explicitly an analogy: the fuller and more chaotic it gets, the less we want to look. The collection inventory that stopped being accurate long ago. The attic after a death in the family. Precisely when things are "bad", the urge to look away grows. Which is why some rooms stay untouched for years, even though we know exactly what is waiting in there.
What Documentation Can Do – and What It Cannot
Here a trick helps that the research also knows about: photograph the thing, write two sentences about it – where it came from, what it means to you – and then part with it. In a donation study, people gave away noticeably more when they had taken a photo beforehand (Winterich, Reczek & Irwin, 2017). The reason: what we actually want to keep is usually the story, not the object.
Three things happen when you document. "That's valuable somehow" becomes a clear entry: what it is, where it came from, what condition it is in. That takes the force out of the feeling without deleting the memory. You see progress – every item recorded is a step ticked off, just like on the loyalty card. And you no longer have to avoid the basement, because you know what is in there.
What documentation cannot do: make the decision for you. It is no substitute for a conversation with your family about what should stay. And when accumulating or letting go becomes a genuine burden, it is no substitute for help from people who know about such things. A photo makes parting easier – the parting is still yours.
When you are ready, the decluttering occasion gives you a concrete way in. How visible progress helps you keep going is covered in Why Writing Down Your Progress Helps You Reach Your Goals. And if you want to start one step earlier: getting organised.
OWNAMIC is a platform for privately documenting possessions, receipts, maintenance histories and proof of provenance. This article summarises research in general terms and is no substitute for psychological, medical or other professional advice.
Sources
- Thaler, R. H. (1980). Toward a Positive Theory of Consumer Choice. Journal of Economic Behavior & Organization, 1(1), 39–60.
- Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1990). Experimental Tests of the Endowment Effect and the Coase Theorem. Journal of Political Economy, 98(6), 1325–1348.
- Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263–291.
- Arkes, H. R., & Blumer, C. (1985). The Psychology of Sunk Cost. Organizational Behavior and Human Decision Processes, 35(1), 124–140.
- Belk, R. W. (1988). Possessions and the Extended Self. Journal of Consumer Research, 15(2), 139–168.
- Plott, C. R., & Zeiler, K. (2005). The Willingness to Pay–Willingness to Accept Gap, the "Endowment Effect", Subject Misconceptions, and Experimental Procedures for Eliciting Valuations. American Economic Review, 95(3), 530–545.
- Nunes, J. C., & Drèze, X. (2006). The Endowed Progress Effect: How Artificial Advancement Increases Effort. Journal of Consumer Research, 32(4), 504–512.
- Kivetz, R., Urminsky, O., & Zheng, Y. (2006). The Goal-Gradient Hypothesis Resurrected: Purchase Acceleration, Illusionary Goal Progress, and Customer Retention. Journal of Marketing Research, 43(1), 39–58.
- Galai, D., & Sade, O. (2006). The "Ostrich Effect" and the Relationship between the Liquidity and the Yields of Financial Assets. The Journal of Business, 79(5), 2741–2759.
- Karlsson, N., Loewenstein, G., & Seppi, D. (2009). The Ostrich Effect: Selective Attention to Information. Journal of Risk and Uncertainty, 38(2), 95–115.
- Sicherman, N., Loewenstein, G., Seppi, D. J., & Utkus, S. P. (2016). Financial Attention. The Review of Financial Studies, 29(4), 863–897.
- Winterich, K. P., Reczek, R. W., & Irwin, J. R. (2017). Keeping the Memory but Not the Possession: Memory Preservation Mitigates Identity Loss from Product Disposition. Journal of Marketing, 81(5), 104–120.