Editor’s Note: This is a guest post by Louis Chew of Constant Renewal.
Not long ago, I tried clearing some of my possessions. It didn’t go well.
As I went through some old books and notes from school, I wondered to myself if I’d ever use them again. Deep down, I knew there was no chance I’d ever read the same books I enjoyed as a teenager. Still, I kept them. I reasoned with myself that maybe someday someone I knew would need them.
It’s safe to assume that it’s extremely unlikely that someday will ever arrive. The truth is I don’t need those books anymore. Neither did I want them anymore. Yet, I still couldn’t get rid of them. It just feels right to keep those items in my life.
I’m probably not alone in this. This thought process is something that most of us go through whenever it comes to our possessions. Some call it sentimental value. But the better answer is probably found in economics and psychology.
The Endowment Effect
In the 1970’s, psychologist Richard Thaler noticed a weird pattern.
A man who bought a bottle of wine for $5 a few years ago was offered $100 by the wine merchant to buy the bottle back. This was a fair price that the bottle would probably fetch in an auction. But the man declined to sell. When offered a chance to buy a similar bottle from the wine merchant for $100, the man also refused. The man didn’t necessarily appreciate the wine, but he was still unwilling to sell at that price.
This wasn’t an isolated incident; in fact it’s all around us. The Economist recently published an article that surveyed how much people were willing to pay for legroom in an airplane. When told they did not have an automatic right to decline, but would have to negotiate for it, the recliners were only willing to pay $12 on average for this comfort. But when asked how much they would need to be paid to give up their own legroom, they required on average of $39.
The inconsistency is revealing. Psychologists call this the Endowment effect: it’s the tendency for us to overvalue things we own. It explains why we are so unwilling to give something up once we have ownership of it.
At first, the researchers thought that this was a classic case of loss aversion, where we feel the pain of losing something more strongly than the pleasure of gaining something.
That sounds logical, but there’s a more insidious reason. Psychologists have also concluded that this overvaluation may stem from our sense of ownership itself. We value something more simply because it is ours. If we own a car, laptop, or watch of a certain model, we would similarly overvalue that same object owned by someone else because we own one ourselves.
Fighting The Endowment Effect
The Endowment Effect often goes unnoticed by us in most scenarios. What can we do then to counter this phenomenon? Here are three strategies you can apply:
Ask yourself: how much would I pay for this if I didn’t already own it? More often than not, you’ll find that the answer is nothing. If that’s the case, it’s a clear sign you value an item not because of its extrinsic or intrinsic value, but simply because of the endowment effect.
Consider the utility of the item. How much do you really need this item? The 80-20 principle holds true for our possessions as well: 80% of the utility we get comes from 20% of the possessions we own. Is this item adding value or simply creating clutter?
Borrow and don’t own. Luxury brands often offer customers a fitting, trial, or a test of their product. We take advantage of this offer because it’s free. But what we don’t realize is that the endowment effect is already beginning to influence our decisions: we feel like we own that dress or car we’re trying out.
It’s little wonder we walk out of stores with new possessions and less money in the bank more often than we like. If you want to try out a product, borrow it from a friend. This way, the obligation to return the borrowed item will prevent you from holding onto it indefinitely.
The endowment effect takes a larger psychological toll on us than we realize. Every year, we go through the same process of cleaning and figuring out where to store our possessions. Don’t let this happen to you. Take the time to solve this problem once and for all. It’s far better to de-own than declutter.
The cost of ownership is often greater than we think. But that’s not all. The cost and value of things become great only because we own it. And the more we recognize this, the more we’ll feel the liberation of less.
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Louis Chew blogs at Constant Renewal where he inspires others to overcome mental barriers and fears to live their best life.
I had a flood that destroyed most of my belongings during Hurricane Ike. I really don’t remember what most of it was. It totally broke my dependence on “stuff”.
When I do a cleanout, I do it like this: If I saw this at Goodwill today, would I buy it? If the answer is No, then it goes to the Charity box!
Yep. My question is “ if this was £1 in a charity shop, would I buy it”?
It is a spurious line of reasoning because the value of a cherished and long-owned item cannot be simply expressed by a monetary or exchange value.
Should article say “ automatic right to _recline_”? (It says ‘decline’)
Most of my books are the one I read and re – read and
Own.
I like to have my own copy at the store .
“Ask yourself: how much would I pay for this if I didn’t already own it?” – That is a great question to add to my self-talk when I am cutting down.
It is a spurious line of reasoning because the value of a cherished and long-owned item cannot be simply expressed by a monetary or exchange value.
This is my biggest block to really paring down. I’ve reduced a great deal and donated a lot of decent stuff! But there’s emotional stuff that’s hard to release.
I inherited the idea that books are “sacred” from my father who loved stuffing the shelves with hundreds of classics. Then I realized that once I read a book it became a part of me, in my head, in my soul, so to speak; and I could easily let go of the physical book while “keeping” the experience of the book with me always. I now have more space in my life and less guilt about “getting rid of my books.”
I got the same emotion about keeping books from my Mom. I think it must have come from when they lived and books were more valuable to have and keep. Makes sense for the time. Then…..I moved into a 3rd floor walk up and that was the end of keeping books with the exception of big coffee table picture books or ones that were an heirloom. Now we can have books on our phones or tablets. I’d say I have a dozen books and my favorite book from childhood, “The Story of Boo.” About being afraid of the dark in my bedroom and how shadows can look like scary things.
got to admit, getting a little spooked was my fav too. I used to plunge into the “and then there was none” Agatha wrote I’m a big lover of Agatha Christie, she has written some fantastic murder mysteries and her stories never get tiring. basically the story is about 8 acquaintances they’re the only ones on the Sun Bay Beach Island and someone is killing them off one by one in accordance with the Ten Little Indians rhyme . And I swear I never saw it coming, and I’m usually very good at it. It’s just a very clever novel, full of mystery and suspense and easily quite frightening at times. Its one of the best of her, Christie doesn’t have to write a 500 page novel with a massive back story, her mysteries are very simply put together but always clever and hard to decipher. I would recommend this book to everyone.
To note, this book was first published under a different title in jolly old England, but even back in 1939 American publishers were far too politically correct to use a title they found so offensive. In 1964 and again in 1986 they changed it and then political correctness struck again. Very suspicious, lets say last but not least.
where did you get that edition ?
I owned and read of 50 Agatha Christie paperback novels when I was in high school. I have since given them away. A few of my favorite books from high school became yellowed with age over the years. I tore the cover off and kept it while recycling the remainder of the book. I wish I had done that with the Agatha Christie Novels. Actually, I did do that with the “And Then There Were None” book, the first Agatha Christie novel that I read after watching the movie version. And then I was hooking on Agatha!
So superb am so thrilled A fan and my favorite if all. Patterson James is another one I just want on my shelves . Can find in bookstores only , if am lucky ? I might find his newest online for few bucks . ? is sone who donate theirs
If I have enjoyed a book I want to share it with others, and hope they also share it. Now I own 0 books, I borrow ebooks and eaudiobooks from our library for free
Have you looked for his bio and recent book? :0)
I have read articles on Josh’s site about car ownership and I do agree with him on that subject. In the UK we have still at present a car leasing scheme for disabled people which part of their allowance goes towards a new vehicle, all maintenance costs are covered by this plus breakdown and insurance . The difference this makes to me mentally is incredible, I don’t own this car and never will , in 3 years I will give back and it will be replaced by another one. I keep this vehicle clean and tidy and fuel it . I said to my wife I wouldn’t want to “own” a car this new as it would be constant worry about the responsibility of it . The mental freedom of not owning is incredibly uplifting and that applies to any product .
My husband is a sucker for the advertised coin collections. Each coin cost us $95 plus shipping. Come with a free case. Not sure how many coins, 50 or so. I feel we won’t get our $$back for them someday. How do you feel about this “stuff”. Drives me crazy. We even have silver bars in our safe paid $1,200.
The price of silver is way up (historically speaking). If you’re hoping to get money from them, now might be the time.
If you cannot store your books in clean dry places, please give them away to someone who can. When we receive old musty books that were stored in a basement, they smell moldy – no one will buy them and they get tossed in the dumpsters instead of being put on thrift shop shelves for resale. Think seriously about storage for your treasures – it is a major problem. Same safeguards for textiles, clothing, curtains, linens, blankets, etc. If they stink, they will be dumped. Most thrift shops do not have laundry facilities and they sell items at very low prices so the cost of cleaning is not something they can afford to do. Even filling up the dumpsters gets to be a major expense.
This makes a lot of sense, I have been struggling and working for several years now to let go of way too many “special” or valuable items. It’s like a war, and each success is like a battle won. I am seeing light at the end of the tunnel, thanks to “uncluttered “ course. Thanks Joshua, staff, and family?
I have this exact problem! I feel like I’m growing in strength, but I have finished all the ‘easy’ stuff – so each ‘difficult’ one is certainly a WIN! I do keep on reading about minimalism, so as not to fall back into unconscious and mindless consumerism or my ‘just in case’ mentality of old.