Recognise personal smell, something that may have an effect in itself (7)
I believe the answer is:
placebo
'something that may have an effect in itself' is the definition.
'recognise personal smell' is the wordplay.
'recognise' becomes 'place'.
'personal smell' becomes 'bo' (abbreviation for body odour).
'place'+'bo'='PLACEBO'
(Other definitions for placebo that I've seen before include "Medicine given for its psychological benefit alone" , "Something used to calm or humour a person" , "Sham medicine used in test or for effect" , "Calming measure" , "memorial service" .)