The IKEA effect

People overvalue their own creations. In an experiment, people liked an IKEA storage box 52% more and were willing to pay 63% more when they assembled it themselves.

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📝 Intro

Today’s study is probably the most popular one ever covered in Ariyh - so you may have heard about it before.

It’s also borderline old (Sept 2011; I focus Ariyh on studies that are maximum 10 years old - by then a few books may have covered them).

But considering how powerful the effect is, it’s worth understanding how to apply it.

P.S.: Dan Ariely, one of the co-authors of this study, is a celebrity in the world of behavioral science.

At Duke University he founded “The Center for Advanced Hindsight” (I love the name) and performed several groundbreaking studies.

If you’re interested in his psychology research, you can check out one of his books (I recommend Predictably Irrational) or his documentary The (Dis)Honesty Project.

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Previous tip: Use consistent endings in discounts (All tips here)

People overvalue products that they build themselves

Impacted metrics: Customer satisfaction
Channels: Product | Customer journey | User experience (UX)
For: B2C. Can be tested for B2B
Tip type: Existing research (September 2011)

📈 Recommendation

Find ways to involve your customers in building the product they’re buying to make it feel their own (e.g. assemble a chair, design part of their website).

Make sure the steps aren’t too difficult, or it will backfire.

They will love and value your product more.

🎓 Effects

  • People value products that they assemble themselves higher than ready-made products.

  • They value them almost as much as products created by actual experts and expect others to value them the same (they don’t).

  • This happens for both utilitarian (e.g. a standard cardboard box) and hedonic products (e.g. customized sneakers).

  • In experiments, people:

    • Were willing to pay 63% more for an IKEA storage box if they had assembled it themselves, compared to when it was already assembled. They also liked it 52% more

    • Valued an origami they made themselves almost 5 times higher than what others valued their creations ($0.23 vs $0.05). They valued it almost the same as what other people were willing to bid for an origami made by an expert ($0.27)

  • If people fail to complete the creation or build it and then destroy it, the effect disappears.

  • The effect exists for both amateurs and those who enjoy “do-it-yourself” (although it’s stronger for the latter).

(How much people bid on an origami, depending on who made it - Click to zoom in)

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🧠 Why it works

  • The more work we put into something, the more we value it. We do this as a way to justify our effort.

  • This is why, for example, we tend to rate our jobs as among the things we least prefer doing, but also one of the most rewarding.

  • This behavior isn’t exclusive to humans. Rats and starling birds prefer food that requires effort to obtain.

  • In order to value the result of our efforts, we need to successfully complete the task. If not, we feel negative emotions and regret.

  • It’s also likely (but untested) that we like self-assembling a product because it makes us feel competent and gives us something to display that competence to others.

✋ Limitations

  • The study tested only physical products (e.g. origami, Legos). However, the effect should hold in other situations too (e.g. you will value more your own custom analytics dashboard, than a prebuilt one)

  • The experiments were performed only on small, inexpensive items. Although untested, the effect should extend to even very expensive items. For example, a person will value their self-built wooden patio much higher than others will.

🏢 Companies using this

  • IKEA is so top of mind in this domain that the effect is named after the brand.

  • Other classic examples include Build-a-Bear and Lego.

  • It’s easier for online products or services to incorporate elements of this effect in their onboarding, and many seem to do so (although this is unlikely to be the only reason). For example, Stripe encourages users to add their logo and use their brand colors when they sign up.

⚡ Steps to implement

  • Think about whether your customers are sufficiently involved in your brand and product to be willing to put effort into building some of it themselves (rather than just walk away). This is not typically the case for low involvement products like toothpaste, shampoo.

  • Find ways to involve customers in building or assembling their final products. For example, if they’re signing up to your online platform encourage them to customize part of the design so it feels theirs.

  • Make sure it’s not too hard to complete the product, for example:

    • Give clear instructions

    • Place constraints on how much creativity people can apply (since that’s not the goal)

🔍 Study type

Lab experiments. United States

📖 Research

Norton, M. I., Mochon, D., & Ariely, D. (September 2011). The IKEA effect: When labor leads to love. Journal of consumer psychology, 22(3), 453-460.

[Link to paper]

🏫 Affiliations

Harvard Business School; A.B. Freeman School of Business, Tulane University; and Duke University. United States

Remember: This research could be disproven in the future (although this is rare). It also may not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.

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