Home improvement is a window on basic human foibles (Image: Bill Skyes/Image Bank/Getty Images)

WHEN instant cake mixes hit US shelves in the late 1940s, sales were disappointing. Pioneering consumer psychologist Ernest Dichter went into the nation’s kitchens to investigate. His interviews with housewives led him to a startling conclusion. The mixes made baking too easy; cooks felt undervalued. On Dichter’s recommendation the next generation of mixes required the addition of a fresh egg. They sold like hot cakes.

The story is an example of an odd phenomenon in modern consumer societies. Economic orthodoxy dictates that we should place more value on items that spare us work. As we increasingly identify ourselves as money-rich and time-poor, we should be prepared to spend more of the former to save the latter. But humans and economic orthodoxy don’t always see eye to eye. “People have this very strong, internalised notion that effort equals quality,” says behavioural economist Michael Norton of Harvard Business School in Boston, Massachusetts.

The idea seems embedded in animal psyches. In 1962, psychologists Douglas Lawrence and Leon Festinger of Stanford University in California showed that rats offered the same food reward were more eager to climb up a ramp at a 50-degree incline to get at it than one angled at a less daunting 25 degrees. For most of human history, it was also a good rule of thumb: the higher up the tree you climbed, the more and better fruit you were likely to find, simply because it was less accessible.


Things started to go awry for humans during the industrial revolution. Many of the tasks essential to survival became automated – a process that, arguably, reached its apogee in the instant cake mix. Our thought processes evolve more slowly, however, leading to cake-mix confusion, and leaving us open to marketing trickery. “You can make people believe that if effort is put in, the result is of higher quality,” says Norton.

He has dubbed this phenomenon the IKEA effect, in honour of an obscure start-up that harnessed it and went on to great things. The world’s largest furniture retailer is a master of shifting labour costs to the buyer and earning kudos in return. This year, Norton and his colleagues Daniel Mochon and Dan Ariely set out to find out exactly how.

In a series of experiments they asked people to assemble IKEA boxes – a boring, banal task – or to engage in the more pleasurable activities of folding origami or building Lego sets. The participants then had to bid small sums for the products of their labour, or for a custom- or expert-made equivalent. The results were impressive. People bid considerably more for their own creations, even when they were plain old IKEA boxes. When it came to origami, they stumped up nearly as much for their own forlorn frog or bird as for the same animal folded by an expert – even though other participants subsequently rated their efforts as “nearly worthless crumpled paper” (Journal of Consumer Psychology, DOI: 10.1016/j.jcps.2011.08.002).

People stumped up more for their own creations – even when others rated them nearly worthless

But is it really the act of creating something that increases our sense of its worth? A rival interpretation was provided by the economist Richard Thaler in 1980. Known as the endowment effect, it suggests that we value things more highly because we own them. Others have since suggested that this effect intensifies the more time we spend with something. To test this, Norton and his colleagues had their participants “unbuild” Lego constructions, and so spend more time in contact with them. The result was that they no longer valued them any more highly than similar, custom-made products. Those who were forced to abandon half-built objects likewise no longer had quite the same sense of the objects’ worth.

The IKEA effect suggests that when looking around for last-minute gift inspiration for Aunt Agatha, you could do worse than get her some flat-pack shelving. Although she might look askance at the Allen key and cryptic instructions that fall out of the package, in the long run she will thank you.

Something similar may also help to explain why in many spheres we are seeing a return to the cult of the artisan. These days there are websites where you can pay more to do more, from mixing your own muesli to designing your own T-shirt. According to Martin Schreier, who studies innovation and marketing at Bocconi University in Milan, Italy, such sites satisfy two basic human needs: they allow people to achieve “preference fit”, by tailoring objects to their own specifications, and they require them to invest effort in the production process, which causes them to value those objects more highly. Schreier’s lab experiments have shown that people are willing to pay twice as much for a product they have customised than for an identical, off-the-peg one – and the perceived increase in value is attributable in roughly equal parts to preference fit and effort investment (Management Science, vol 56, p 125).

Kelly Herd, who studies marketing at Indiana University in Bloomington, identifies a third factor: a customised product takes on elements of the customer’s identity, reflecting them back to themselves. This, she thinks, could help explain the huge discrepancy between how people who have designed and customised an object rate them, and how other people rate them. “People create pretty objectively unattractive stuff but they love it,” she says.

So here’s a thought for when the mass-produced gifts have been safely stowed away: might our wildly inflated estimation of the fruits of our own labours be harnessed as a motivational tool in the workplace? Schreier thinks so. He points out that, as Karl Marx noted, another effect of the industrial revolution was to divide up the production process and assign each worker a part of it, meaning that no single worker had the satisfaction of bringing a process they had started to completion. One way to recapture that satisfaction, even with the most banal and repetitive processes, would be to make workers focus not on one task but to follow products through every stage of the production line.

But exploiting the IKEA effect in the workplace might harbour dangers, warns Norton. “When you develop things yourself, you believe they are better, and therefore you can’t possibly see any value in anybody else’s idea,” he says. At its most extreme, this results in a form of corporate nationalism known as “Not Invented Here” syndrome, in which companies refuse to adopt products or ideas that originate outside, even if doing so would provide a competitive advantage. When Steve Jobs and Steve Wozniak approached Atari and Hewlett-Packard in the 1970s with their idea for a personal computer, the two outsiders were shown the door. Apple, the company Jobs and Wozniak then went on to create, has guarded against making the same mistake by regularly acquiring other companies and technologies.

Such corporate machinations seem a world away from life under the tinsel, but it seems they all come from the same atavistic motivation. That is something worth mulling further over a cup of tea. Best make it yourself, though. After all, it’s only you that really knows how.