2011
Working Paper
HBS Working Paper Series

The 'IKEA Effect': When Labor Leads to Love

By: Michael I. Norton, Daniel Mochon and Dan Ariely

Format:Print
| Language:English
| Pages:34

Abstract

In a series of studies in which consumers assembled IKEA boxes, folded origami, and built sets of Legos, we demonstrate and investigate the boundary conditions for what we term the "IKEA effect&"—the increase in valuation of self-made products. Participants saw their amateurish creations—of both utilitarian and hedonic products—as similar in value to the creations of experts and expected others to share their opinions. Our account suggests that labor leads to increased valuation only when labor results in successful completion of tasks; thus when participants built and then destroyed their creations, or failed to complete them, the IKEA effect dissipated. Finally, we show that labor increases valuation of completed products not just for consumers who profess an interest in "do-it-yourself" projects, but even for those who are relatively uninterested. We discuss the implications of the IKEA effect for marketing managers and organizations more generally.

Keywords

Investment; Labor; Resource Allocation; Valuation

Citation

Norton, Michael I., Daniel Mochon, and Dan Ariely. "The 'IKEA Effect': When Labor Leads to Love." Harvard Business School Working Paper, No. 11-091, March 2011.