Dear Economist,

I am in doubt whether it is worth changing school for my last year of A-levels. I would be living in a much better place (Cambridge, whereas I am now in Dover) and getting more tuition. I am likely to have better accommodation, more freedom and will meet people with diverse interests. But is it worth the risk of not getting into university or getting lower grades on my A-levels? Please help me to solve this dilemma.

GP, Dover

Dear GP,

Let us run through this supposed dilemma again. You are considering a move to a place that appears to be better in every dimension, including the academic one. Yet you are hesitant because of a perceived risk.

I am tempted to recommend you consult a shrink rather than an economist. Fortunately, so-called behavioural economists combine the best qualities of economist and psychologist. And any behavioural economist would quickly diagnose that you are a victim of the “endowment effect”.

The endowment effect is an irrational preference to keep what you have rather than switch. Better the devil you know and all that.

A typical experiment designed to reveal the effect would give participants a small gift for participating in the experiment. Later, the participants would be invited to swap the gift for an alternative. No matter what the original gift was, or what the alternative is, people, irrationally, are reluctant to make the swap.

Your attachment to substandard lodgings and scant tuition in Dover is clearly irrational. Move to Cambridge at once. You may be wrong, of course, but a risk of error is no excuse for inaction.