When In Doubt, Sell!

Professor Tyler Cowen (emphasis mine):

Endowment effects are significant, especially for people who are not professional traders of the item in question. That means we tend to value things more, simply because those things are ours.

With some probability, that tendency is just plain irrational. It might make sense to treat our friends or our babies this way, or to act this way in a subsistence economy, but endowment effects should not rule the behavior of not-so-risk-averse well-off, Americans. So if you are even considering selling something, you probably should do so.

And don't buy another commodity, invest in memorable experiences.

Very good advice, indeed! It echoes what I recently commentied on in this post on happiness.

When I moved from Orlando back up to Virginia last year, I consolidated everything I own into two pick-up truck loads. There is something freeing about not owning much and being able to let get of things. There is very little that I miss that I got rid of and it reminds me how much more I value my relationships and experiences in life than any item I've happened to accumulate.

I've made it to all 7 continents without checking a bag. I intentionally travel light and rarely miss anything I've left at home. I've often asked myself, why do I need much more? There really is something to be said for the living the simple life.

Interestingly, Cowen concludes his post with this addendum:

I believe that endowment effects are stronger for items we have paid for or won through competitive effort. This means that your kid should pay for some of his or her college education, read more here.