Aversion to loss of place: The endowment effect for local facilities

Abstract

Facility-decline is often met with community responses including protective behaviour. These reactions to place-change are preceded by the conscious and unconscious valuation of public places as communal assets and subsequent negative evaluation of closure. Previous studies show that closure of local facilities can be perceived as a loss to the community. However, a gap in place-based research in geography and environmental psychology is the lack of attention to psychological biases, such the endowment effect, that could influence in the perceived loss of facilities because people attach more value to something they are used to ‘having’. This paper uses insights from prospect theory as a reference point to theorise the socio-psychological process of dealing with place-change caused by the closure of local facilities. Analysis of a survey conducted in the Province of Fryslân, Netherlands, shows that positive subjective valuation of eight local facilities, as well as negative evaluation of closure, is influenced by the current availability and the social function of this facility in the neighbourhood. The results indicate that the endowment effect exists in the context of facility decline. This paper hopes to ignite a discussion, and to stimulate further research into the effect of psychological biases on place-based behaviour. Moreover, since previous studies show that a perceived sense of ownership and emotional and cognitive bonds can lead to endowment effects in other context, this study paves the way for research into the relationship between collective psychological ownership, place attachment, the endowment effect and overall aversion to loss of place.