The endowment effect says that when someone holds an object, it makes them increase the value of that object. The endowment effect is the one causing people to put a lot of value on material objects because they have an attachment to them and do not want to lose what they already have. Losses are very painful, and thus, the reason why you will avoid not parting with what you have for what you paid for it. One major example is seen in IKEA furniture. Once you build the furniture, its value increases to you even though it's cheap material. You value it more because it's yours, and you do not want to lose it. The endowment effect is related to loss aversion because once you own something and have given it value, if something were to happen to it, it would be considered a loss