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endowment
You value things more simply because you own them.
A 1990 study found that participants required nearly twice as much money to part with a mug they owned (willingness to accept) as they were willing to pay to acquire the same mug in the first place (willingness to pay).
Replaced 'willing to pay to keep' with 'required as compensation to part with' to accurately reflect the economic definition of Willingness to Accept (WTA).
The items in your home are worth more to you than they are to anyone else.
Where this comes from
- Study
- Kahneman, Knetsch, and Thaler (1990), Journal of Political Economy
- What the check found
- The 2:1 ratio is supported, but the terminology is imprecise. One requires compensation (WTA) to part with an object, rather than 'paying to keep' it.
- Confidence
- Well replicated
Related
One of these every day, and every one names the study it came from. When a finding is contested, it says so.