The IKEA Effect: Why We Value What We Create

Have you ever wondered what makes the name “IKEA” so unique? Or have you ever come across the term “IKEA Effect”? Chances are, probably not! But guess what? The very store where you shop for furniture is the reason behind this fascinating psychological phenomenon. The name IKEA itself comes from its founder, Swedish entrepreneur Ingvar Kamprad Elmtaryd Agunnaryd. Now, let’s dive into the “IKEA Effect”. Research suggests that a strong sense of psychological ownership drives this effect, making people value items more when they feel a connection to them—even if that connection comes simply from assembling or customizing them.

The IKEA effect is very similar to another cognitive bias called “The Endowment Effect”. Now that we know what the IKEA Effect is, let’s dive into deeper into its meaning and what psychological impact it has! 

Origin

If you play a role in assembling, customizing, or designing something that you buy, you may unknowingly (and happily) pay more than it’s worth.

The IKEA effect was coined by researcher Michael I. Norton, Daniel Mochon, and Dan Ariely in “The IKEA effect: When labor leads to love.” Researchers studying this phenomenon decided to call it the “IKEA Effect” due to the direct connection with the company’s assembly-required furniture. Norton et al. claim that labor leads to increased valuation only when tasks are successfully completed. When participants built and then destroyed their creations or failed to complete them, the IKEA effect dissipated. 

Valuation

When people participate in the assembly of a product, they gain a sense of pride and ownership in their creation, which increases their perception of its value. When people put effort into something, it becomes more valuable to them than its objective value. Make your customers contribute or at least give them the feeling they contributed. 

Involvement

The act of assembling IKEA furniture creates a sense of personal involvement and accomplishment. In a study by Radtke et al. (2019), kids were more likely to like vegetables if their parents got them involved in cooking activities. Unsurprisingly, the kids who liked vegetables also ate more of them. Involving children in meal planning and getting them to take on simple tasks like mixing ingredients, washing vegetables, and cracking eggs is a great way to encourage their enjoyment of healthy meals. 

Cognitive Bias

People tend to overestimate the value of things they have put effort into creating. This happens because of the psychological attachment formed through effort and involvement. When we build or customize something, we see it as more valuable than it actually is—sometimes even more than a professionally made alternative. For example, in studies on the IKEA Effect, participants believed their self-assembled furniture or origami creations were just as valuable as expert-made versions. This bias can lead people to hold onto subpar work, resist constructive feedback, or even price their handmade goods too high when selling them.

The Confidence

The IKEA effect can also give us a skewed picture of how well we did on something we worked hard on. It can make us overconfident, even when the quality is lacking. In one of the original studies on the IKEA effect, participants believed their novice creations were just as valuable as the creations of experts—and expected others to agree. As a result, we might overvalue things we made ourselves after seeing how much professionals charge for their handmade goods. 

Ownership 

The IKEA Effect does not only impact customers but also extends to employee development. Simply incorporating a customization process can encourage a deeper commitment to professional growth—a win-win strategy for both employees and employers. The sense of ownership goes even further when peer and customer feedback are integrated, leading to improved decision-making throughout the process. The DIY process gives us a sense of pride in our belongings, which is valuable for our self-esteem as we often perceive our possessions as an extension of ourselves.

Enjoyment in Hobbies: 

Buying yarn to knit a sweater may cost more than purchasing a mass-produced one from a store. However, the IKEA Effect makes the handmade sweater feel more valuable, justifying the additional expense and time spent. This sense of accomplishment boosts self-esteem and encourages individuals to take up new hobbies.

Self Efficacy

Research says self-efficacy boost plays a role in the IKEA effect. In other words, feeling like we’re incapable of something increases our desire to prove ourselves and appear competent. People who believe in their own self-efficacy better cope with challenges, recover more quickly from failures or setbacks and are less vulnerable to stress and depression. 

Self Esteem

IKEA’s business model, which often involves customer assembly, taps into this psychological phenomenon.By successfully completing a project, individuals can experience a sense of pride and satisfaction.This can lead to customers feeling more satisfied with their purchases and experiencing a boost in self-esteem. 

Positive Outlook

We are confident in our own abilities, and we have a tendency to think of ourselves as exceptional.our positive self-concepts spill over into the things we have made, leading us to see them as superior or more valuable. 

The IKEA Effect Experiment 

The experiment was conducted by Norton involving IKEA cardboard boxes, origami cranes or frogs, and Lego sets and asked the participants to estimate the value of each object including those partially created by the customers. Surprisingly, the participants who constructed their own origami frogs and cranes valued them roughly five times as much as another group of participants thought they were worth. 

Conclusion

The IKEA Effect shows that when people put effort into making something, they value it more. This applies not just to assembling furniture but also to learning new skills, completing projects, and even hobbies. The feeling of ownership and accomplishment makes the effort feel worthwhile. Businesses can use this idea to increase customer loyalty, and individuals can apply it to boost confidence and motivation. Whether at work or in daily life, taking part in the creation process makes things feel more meaningful and rewarding.

FAQs

1. What is IKEA effect?

A Cognitive-bias where people value items more highly if they belong to them-or even if they just feel a sense of ownership over them. 

2. How does IKEA Effect Vary on Across Different Cultures and Personality Types?

Yes , IKEA Effect can be visibly seen in different cultures and Personality types best examples suited are 

Eg-1: Gaming Communities: Gamers may experience the IKEA effect when they create their own game mods or custom content and they take pride in their creation. 

Eg-2: Indian Culture“SWADESHI’’:Implies self-reliance and domestic production. Many of us prefer products made in India which reflects a sense of pride. 

3. Can IKEA Effect be used to promote prosocial Behaviours? 

When individuals are involved in environmental conservational efforts such as bird feeding, Waste recycle management etc. They feel more motivated to protect the environment. 

4. What are the companies which follows IKEA Effect? 

One such company that uses IKEA effect Partially is ‘’kinder joy’’. IKEA itself and another such great example in technology is canva where it enables the users to create and customise their own designs.