The Endowment Effect

Today, let's consider our industry from a scientific bent. Think of self-storage as being nothing more than a symptom of misguided evolution. Where's this coming from? A fascinating article titled "The curse of untidiness: DNA all over the place," published in this week's Economist.

I recommend giving it a read. But if you're not inclined (perhaps because of ADHD, an evolutionary adaptation to the nomadic lifestyles of past civilization), here's the premise of the argument: An object is worth more to you once you own it. This idea is referred to as the "endowment effect." Somewhere during the course of history—probably at multiple blips on the radar—we (that is, humans) were instilled with a primal instinct to hoard objects, either because they were difficult to come by, or times were exceedingly unpredictable, or we felt they were critical to our social status or physical survival.

This instinct—like the the inexplicable drive to move from place to place for some, or the body's tendency to store fat in others—is written in our DNA. We keep clutter because we are wired to do so. In this case, self-storage becomes a physical solution to a genetic problem. In these words from the Economist article, "Paying more to store something than it is worth may seem doubly irrational. But it enables people to reconcile caveman clutter with modern minimalism, and allows companies to benefit from a huge business opportunity."

So, you managers, owners and operators out there ... does this make you feel better or worse about the product and service you provide? Enabling clutter bugs, while it makes money, is like convincing a patient that he needs his appendix. It's like issuing a placebo drug during an experiment. The very existence of our industry further convinces people that they really do need that cracked vase and the clothes they grew out of five years ago.

Any other theories on this? I'd love to hear them.