IKEA Effect: Why the Thing You Made Yourself Is Worth More to You

Labor changes the laborer's view of the product. Michael Norton, Daniel Mochon and Dan Ariely, who named the effect in 2012, proposed that completing a task is a signal of competence and that the finished object carries the signal: it is evidence of what you can do, and such evidence is not easily sold. The effect does not depend on the object being good: in the origami experiment, builders priced their crumpled frogs and cranes at nearly the level outside bidders set for expert work, and expected other students to value them about as highly.

Two conditions matter. The first is completion. Participants who built a storage box valued it at more than twice the price set by participants stopped two steps short of finishing it, and participants who built a Lego set and then took it apart lost the premium that intact builders showed. Effort alone is not enough; finished effort is what the mind credits. The second is success, which these studies arranged by giving everyone instructions they could follow, and Mochon, Norton and Ariely's 2012 follow-up found that the desire to build was stronger in people whose sense of competence had just been threatened.

Older findings point the same way. Elliot Aronson and Judson Mills showed in 1959 that people who went through a severe initiation to join a discussion group liked it more than those who went through a mild one, the effort justification result. Nikolaus Franke, Martin Schreier and Ulrike Kaiser found in 2010 that customers who designed their own version of a product through a customization tool would pay more for it than for an identical design by someone else, and that the premium depended on feeling the result was their own accomplishment.

The effect has a cost side. Managers who built a plan are poor judges of it, founders overrate the product they built, and anyone pricing something they made is pricing their own competence along with it. The name is a joke at the furniture company's expense, but the company benefits: a customer who has assembled a bookcase has become invested in it.

Norton, Mochon and Ariely published "The IKEA effect: When labor leads to love" in the Journal of Consumer Psychology in 2012. Their first experiment used the furniture itself. Fifty-two students were paid five dollars and assigned either to assemble a plain black IKEA storage box from its instructions or to inspect an identical box already assembled. Each then bid for the box under a procedure in which a random price was drawn and the box sold to anyone whose bid met it, so that honest bidding was the best strategy. Builders bid an average of 78 cents; non-builders bid 48 cents.

The origami experiment is the one the demo reproduces. One hundred and six people in a university student center took part, divided among three conditions. Builders were given an instruction sheet and a square of origami paper, asked to fold a frog or a crane, and then to bid up to one dollar to keep it. Non-builders who did not know the builders bid on those same creations, and the third condition bid on frogs and cranes folded by two experienced research assistants. Builders bid an average of 23 cents for their own work; non-builders bid 5 cents for it, and 27 cents for the experts' figures. The builders' bids and the expert bids did not differ statistically. A separate group of 14 builders estimated what the average student would pay for their creation and gave figures close to their own bids, 21 cents against 19.

Two further experiments tested what the effect needs. In one, 118 people built Lego sets of 10 to 12 pieces, received pre-built sets, or built sets and took them apart, then bid on their own set and a partner's. Only builders who kept their sets intact bid significantly more for their own, about twice their bid for the partner's; unbuilding removed the gap. In the last experiment, 39 people assembled an IKEA box or were stopped two steps before the end. Those who finished bid an average of 1 dollar 46 cents; those who did not finish bid 59 cents.

The amounts are small because the objects were, and the demo's options are scaled to match. The claim is that the premium is large relative to the object's value and survives visibly amateur work.

The pattern appears wherever people finish something themselves and then have to judge it. The rows below are illustrations, not findings from the studies cited on this page.

The effect is harmless at home and expensive in business, so the counters are for the moments when your own work has to be priced or judged.

• Separate the maker from the judge. The person who built the plan, the product or the deck cannot price it. Ask someone who did not.
• Compare against the alternative on the same terms. Put your own version and the bought-in version in front of the same people, without labels, and count the result.
• Expect the premium and discount for it. If you know you overvalue what you built, you can adjust: a maker's estimate of value is a ceiling, not a midpoint.
• Use completion deliberately. The effect depends on finishing, so a stalled project carries less attachment than it will once done; that is the moment to ask whether it should be done at all.
• Let the effect work where it helps. Assembling, customizing and cooking all raise the value of what you end up with at no cost to anyone, and the lift is larger when competence feels in doubt.

The IKEA effect belongs to a family of findings about effort, ownership and attachment.

• It is not the endowment effect, in which owning something raises its value to the owner. The IKEA effect requires labor, not just possession: in the Lego experiment, people given pre-built sets showed no significant premium for their own set over a partner's, while builders did.
• It is not effort justification, the older finding that people value a goal more after suffering to reach it. Effort justification is about reducing the dissonance of a costly choice; the IKEA effect attaches value to a made object and depends on successful completion rather than on cost.
• It is not the sunk cost fallacy, which is continuing a course of action because of what has already been spent. The sunk cost fallacy looks forward and asks whether to keep going; the IKEA effect looks at a finished thing and asks what it is worth.