Beyond Ownership: Lessees and Idiosyncratic Valuation

32 Pages Posted: 19 Jul 2010

See all articles by Gordon Bermant

Gordon Bermant

University of Pennsylvania - Department of Psychology

Heather Barness-Blakeman

University of Pennsylvania

Date Written: July 16, 2010


Previous research has shown that home ownership and possession of a small good both produce an endowment effect whereby endowees value their property higher than its market price. The present study investigates the existence of a bridge between these findings: whether non-owning possession of a home causes the possessor to add a value to the property above its market value. Subjects, who were randomly assigned to one of five conditions that varied engagement with a rented property, completed a survey that harvested subjects’ ideas about fair compensation when a proprietor denies lease renewal to a tenant. Tenants judged as fair more relocation allowance and a higher discounted purchase price than did non-residents. The results suggest that tenants add idiosyncratic value to their residences beyond the market value. This study thus shows promise in helping to develop more representative laws dealing with property transfers and furthers the body of evidence that possession, even without ownership, elicits an endowment effect.

Suggested Citation

Bermant, Gordon and Barness-Blakeman, Heather, Beyond Ownership: Lessees and Idiosyncratic Valuation (July 16, 2010). 5th Annual Conference on Empirical Legal Studies Paper, Available at SSRN: or

Gordon Bermant

University of Pennsylvania - Department of Psychology ( email )

3815 Walnut Street
Philadelphia, PA 19104-6196
United States

Heather Barness-Blakeman (Contact Author)

University of Pennsylvania

Philadelphia, PA 19104
United States

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