Questions tagged [value]

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Purchase price equals present value of future price

Suppose we need to decide if to acquire A now for \$95.24 or in one year for $100. If the opportunity cost is 5% annual, what option would you choose? My possible solution: as the present value of \$...
monalisa's user avatar
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1 answer
34 views

What is a standard practice for assessing the price of a company?

I mean the price the company would be purchased for.
Julius Hamilton's user avatar
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2 answers
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Where does value originate?

In Austrian economics, the theory of imputation refers to the idea that prices of the factors of production are determined, to a large extent, by the value that consumers perceive the final good or ...
Joebevo's user avatar
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1 answer
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Why is the Modigliani-Miller theorem logical?

Quoting this SE question, who put it nicely, the M&M theorem basically states that: ...in a no-frictions world, two identical firms have the same enterprise value, regardless of their financial ...
snatchysquid's user avatar
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Calculating the value of this asset

calculate the cash value of a financed asset that is paid in the following way: an initial payment of 500,000, in month 2 a payment equal to half its value, in month 7 a payment equal to a third of ...
VOZ ESTOICA's user avatar
3 votes
1 answer
118 views

Validity of asking about WTP (willingness-to-pay) when dealing with paid services

The question that I'm interested in is whether questions about WTP make any sense in a scenario where we are dealing with a paid service. To give it a little bit of context: consider Uber, for example....
Anton Brennerman's user avatar
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The equation for ad valorem or value tax is given by (1 + τ ) p1x1 + p2x2 = m. Does this imply that higher the p1 higher the tax?

In other words, do luxury goods get taxed more while cheaper goods are taxed less in the case of value tax? Any insight would be appreciated. Thank you!
Amit Daultani's user avatar
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20 views

Reference request: Applying statistical mechanics to price and value

I recall reading a paper a while ago, but have forgotten its title, authors, and abstract. The topic of the paper was how to define "value" without regard to any particular theory of value, ...
Corbin's user avatar
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Quantifying stability and source of value

Suppose economies A, B and C have equal GDP. However: 90% of A is goods of strictly investment value (artwork, NFTs) 90% of B is tools for producing other goods (resources, machinery) 90% of C is ...
Therac's user avatar
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company value, shares, NPV

Let's say we want to evaluate the value of a company. One way is to calculate the present value of the cash flows. I do not specify the cash flows and the discounting rates $r_i$ here. Then the ...
callculus42's user avatar
2 votes
2 answers
66 views

Why is a cash expense deducted but an expense in-kind not?

Say I am self employed and want a website for my business. If I pay someone for the service I can, in most cases, deduct this from my profit to reduce my tax burden. If I forego billable hours or I ...
Three Diag's user avatar
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increased cost of non-labor inputs and the effect on the value of a commodity (according to the Labor Theory of Value)

According to the Labor Theory of Value, technical innovation in the production process lowers the value of a commodity -- insofar as technical innovation generally is aimed at producing cheaper ...
Lucky's user avatar
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How to value of a stock that cannot be sold for a fixed time period?

Consider an employee (perhaps a CEO or another high-ranking employee) that has received compensation in the form of the firm's stock. The stock must be held for at least 3 years before selling. How to ...
Richard Hardy's user avatar
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Constructing Valuation As a Function of Condition

Suppose there is an item that deteriorates with use, its condition expressed as a number between $0$ (completely broken condition) and $1$ (perfect condition), for which I want to assign a monetary ...
user10478's user avatar
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0 answers
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Every Submodular Valuation Can Be Represented as a Maximum of Additive Valuations

According to this paper, "every submodular function can be represented as a maximum of additive valuations." It gives an algebraic description as well, but I am having trouble internalizing ...
user10478's user avatar
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1 answer
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Convert UN Data Table 2.3 to USD (Output, gross value added, and fixed assets by industries at current prices, ISIC Rev. 3)

How (un) reasonable is to take the ratio of GDPs in local currency over GDPs in USD to convert http://data.un.org/Data.aspx?d=SNA&f=group_code%3A203 to current USD? I have looked for a version un ...
Pacha's user avatar
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2 votes
1 answer
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A question on Marx' "Value, price and profit"

In his lecture Value, price and profit Karl Marx argues that profit is made by capitalists by (i) selling commodities for their real price (= real value expressed in money), (ii) paying the workers (...
Hans-Peter Stricker's user avatar
1 vote
2 answers
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Why is Dominant-Strategy Incentive Compatibility treated as a virtue, and are there mechanism design models which treat it as undesirable?

Why is Dominant-Strategy Incentive Compatibility treated as such a ubiquitous virtue? In this lecture, the answer given from the perspective of a non-principal player is, "it's easy to play; you ...
user10478's user avatar
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1 answer
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Is there an intuitive way to understand why increase in supply decreases value?

"The more of something there is, the less valuable it is" is a common way I hear Supply & Demand explained, but it doesn’t make much intuitive sense to me. Why exactly does a unit of ...
Anthony Fallone's user avatar
1 vote
1 answer
680 views

What does THO, as in "USD THO", stand for in export statistics?

I've noticed that some online sources use "USD THO" as a unit to express rates of transfer of value. Specifically, I saw it in measuring Chinese exports to Russia in this video at 21:20 ...
Mr. Nichan's user avatar
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2 answers
66 views

Question about supply and demand?

I am reading a book on economics and it says that more supply equals less demand because people won’t pay a high price for things that are plentiful: "high supply will push prices down as ...
Anthony Fallone's user avatar
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2 answers
240 views

What does the price of bitcoin per ounce of gold tell us?

For example, see the below graph from https://charts.woobull.com/bitcoin-vs-gold/ It seems that intention is to isolate the effect of US dollar when assessing bitcoin's value, e.g. BTC quoted in US ...
StatsScared's user avatar
0 votes
1 answer
95 views

How is value determined?

If I create a new currency (perhaps a cryptocurrency) and I wanted it to be the only currency usable to purchase an item/service, how would I determine the price of that service? I would think that it ...
Kile Maze's user avatar
3 votes
1 answer
81 views

Intuition behind value added as TFP measure

In some papers the authors use value-added over capital and labor as TFP measure, what is the intuition behind this? For example, in one paper I just read the authors use $ \frac{VA}{(p_{K}K + p_{L}L)}...
futur3boy's user avatar
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Is it possible for a coin / token to act as long-term store of value and money at the same time?

I have recently watched a discussion about Bitcoin and its usage and one person argued that Bitcoin is a good way I will make the question as focused as possible by narrowing the terms: store of ...
Alexei's user avatar
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1 answer
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Irreversibility in the Creation of Value

In his book The Origin of Wealth, Eric D. Beinhocker says that A pattern of matter, energy, and/or information has economic value if the following three conditions are jointly met: Irreversibility: ...
Humberto Fioravante Ferro's user avatar
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What's the name of this particular economics phenomenon (loss and increase of value over many years)?

I have almost no knowledge of economics so I decided to ask you here. Sorry for tags but I didn't have any idea what should I use. Some things loss its value due to quality and functionality increase. ...
Soren V. Raben's user avatar
1 vote
1 answer
41 views

Price/value with and without consideration of resale

When thinking about various economic phenomena I have often found it useful to separate out the value of an item purely for its own sake from the value when you also consider the fact that you may ...
Mick's user avatar
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2 votes
1 answer
83 views

Is M&A valuation a good proxy for company fair value?

I'm building a model for estimating a fair value of a company. Naturally I'd like to see if model's predicative capabilities are any good. Would using a value of a friendly M&A deal be a good ...
ruslaniv's user avatar
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1 answer
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is it better a low or high WACC for a company valuation?

I'm doing a statistical report of some italian banks and I'm looking for correlation between Corporate governance practices and bank values. I'm focusing on WACC and I would like to understand if an ...
Alessandro Recchia's user avatar
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Are there multilevel marketing companies that aren't pyramid schemes?

I've been doing lots of research on pyramid schemes, and the rebranding and institutionalization of the industry in the 1980s with trade groups, heavy investment in politics, etc. The term "...
TheEnvironmentalist's user avatar
2 votes
1 answer
71 views

Is the value of a product measured in money a reliable measure of the economic value of this product?

This could rather be a philosophical question but would be curious to know the economist's POV and how these two (value of the product, total economic value of the product) correlate.
Hemal's user avatar
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1 answer
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Equity value vs Stockholders Equity

Is equity value is the same as stockholders equity? I have been given liabilities and stockholders equity total also and I need to calculate the leverage ratio, but I not sure what numbers should I ...
Berta's user avatar
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1 vote
1 answer
381 views

Can machines create value?

Marx wrote that only humans can create value. But why is that so? Ok humans can, with their work, create more value than they need to consume in food and so on, that's obvious. But why is this so ...
user117640's user avatar
0 votes
1 answer
64 views

How much is currently invested in artificial general intelligence research and development?

Glossary: Artificial general intelligence (AGI) is the name given to an upcoming technology that would be able to solve all sorts of problems, like a human, and unlike more specialized existing ...
Winston's user avatar
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3 votes
1 answer
692 views

What's a "correct price" really? Does it exist?

Lately I've been thinking about the concept of price setting in market economy. There are various (perhaps naive) view on this such as: The price is always the optimal for the buyer and the seller. ...
mavavilj's user avatar
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3 votes
5 answers
1k views

Why does fiat money have value?

Or as Tobin (1992) put it: "How Can Money Have Positive Value in Exchange?" Money, however, is an embarrassment to value theory. According to standard theory, something can have positive ...
user avatar
2 votes
1 answer
121 views

What was the "invariable measure of value" problem and how did Sraffa solve it?

Fonseca (HET Website) writes: Only much later did Piero Sraffa (1960) finally solve the "invariable measure of value" problem and re-ignited interest in Ricardo's theory. What was the &...
user avatar
0 votes
1 answer
65 views

Value of money (incomes) question - what is the "r" here?

I would like some help with a fairly basic "value of money" question. (I'm very much a beginner in this field so please bear with me.) I'm writing about income changes throughout a decade (2010-2019)....
Vermilion's user avatar
0 votes
1 answer
28 views

Market Cap ranges for Tech Companies

I'm trying to get an idea of how big tech companies are based off market cap. This is not my typical field of expertise, so please pardon me if I say something naive. I've found this site (https://...
Seph Reed's user avatar
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0 votes
4 answers
138 views

What is the difference between microeconomics money and macroeconomics money?

In microeconomics, \$USD are a store of value. I can sell a candy bar for \$1, and I can hang onto that \$1 for a year and then buy the same candy bar for that same \$1. If I print \$1 (and get away ...
Him's user avatar
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0 votes
1 answer
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Renewal of multiple notions of value in contemporary (green, public good) economy and are there general game theories?

https://en.wikipedia.org/wiki/Exchange_value mentions 4 notions of value: economic value, exchange value, use value, price. But this article also mentions that these are Marxian concepts and the ...
TomR's user avatar
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1 vote
2 answers
1k views

EMH: Difference between market price and fundamental value?

I am confused by the relation between stocks market prices and fundamental (or intrinsic) values stated by Efficient Market Hypothesis. How these deviates regarding to efficient market theory or are ...
Lothilla's user avatar
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1 answer
154 views

Who is Butler in Marx' footnote in Das Kapital?

In footnote [7] of Marx's Capital, T.I, Ch. 1, Sec 1, after ...contradictio in adjecto, there are these quotes: «Nothing can have an intrinsick value.» (N. Barbon, t. c., p. 6); or as Butler says - «...
tatojo's user avatar
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1 vote
1 answer
443 views

Tendency of the rate of profit to fall

https://en.wikipedia.org/wiki/Tendency_of_the_rate_of_profit_to_fall The tendency of the rate of profit to fall (TRPF) is a hypothesis in economics and political economy, most famously expounded by ...
Wallows's user avatar
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2 votes
1 answer
207 views

Why's it always better to choose a lump sum than periodic payments over time?

Gill, Madura. Personal Finance, 4th Canadian Edition 2019. p. 56. True or False? It is always better to choose a lump sum than periodic payments over time. p. 519 T Doesn't the ...
user avatar
0 votes
1 answer
40 views

Why the source profit is not only trade markups?

I'm researching the source of profit. In Marx I've found the following passage: If then, speaking broadly, and embracing somewhat longer periods, all descriptions of commodities sell at their ...
aikrikunov95's user avatar
0 votes
1 answer
36 views

Is the Paradox of Value relevant to the value of labour?

I trust we're all familiar with the Paradox of Value -- that queer state of affairs in which diamonds, which are not good for anything, are very expensive, while water, which we all need to not die, ...
Roger's user avatar
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1 vote
2 answers
125 views

Value of Currency Itself

What is the value of an individual piece of currency itself based on the efficiencies it allows in trade, in contrast to the value it represents? For example, people often talk (complain) about the ...
Bill Clark's user avatar
0 votes
1 answer
29 views

Gapminder's Dollar Street and the role of self-supply

I find it quite hard to get a clear picture of what the income numbers in Gapminder's Dollar Street tell. How to compare \$27 in Burundi with \$10,098 in China? What would it mean that the family in ...
Hans-Peter Stricker's user avatar