As a person with a BA in psychology, I have just the right level of expertise to get really annoyed and self-righteous about the use of psych-related terminology in the general public. There are a few terms that are almost always misused, and I've decided to take it upon myself to clear the air once and for all. That's right, I am about to present to you Part One in the Definitive Clearing Up of Basic Psychology Terminology!
Today's term: placebo effect.
This word gets thrown around like chicken in a fast food restaurant kitchen, mostly due to its prevalence in both psychological and medical research. It's like everyone sort of knows what the placebo effect is, but no one seems to know or care to find out if they're using the word correctly. Well, HERE I COME TO SAVE THE DAY (mighty mouse!)
A placebo effect is quite simply what happens when a treatment's efficacy is increased based solely on the person's belief in the effectiveness of the treatment, above and beyond the actual effectiveness of the treatment. The most obvious example is the infamous sugar pill. You give someone a sugar pill (the placebo) and tell them that it is a powerful medication to treat [X]. They take the sugar pill, and, believing that it will help [X], it does.
The placebo effect can occur in such ways with medications or other medical treatments, as well as psychological treatments. Basically anything where a person thinks that something (a pill, procedure, or therapy) is going to have a positive impact on their health or well-being.
Where the placebo effect does NOT apply is to external events. So, believing that something is going to happen and then seeing it happen is not the placebo effect. It might be coincidence, self-fulfilling prophecy, or the fact that you actually made this thing happen. It might be nothing. For example, apparently a lot of the buttons you press at cross walks are actually not hooked up to anything - everything's just on timers and pressing the button does nothing. So when you press the button and then watch the lights change, you didn't actually make that happen. Now pay attention, because this is very important: your belief that you made the lights change by pressing the crosswalk button is NOT an example of the placebo effect! It is simply an example of a false sense of control or something else lame like that.
So now you know: a placebo effect only concerns how your beliefs in the efficacy of something directly interacting with you impacts its actual efficacy, regardless of how effective it actually was to begin with. It has no bearing on people, places, or things outside of yourself and your mental or physical health.
(I'm pretty sure the third-to-last sentence here was incredibly confusing. Sorry.)