What is Value?

Price

Everyone knows "price" and "quality", but ignores "value".

What is price?

The amount of something someone is willing to trade you for something else. Those somethings can be anything. If you have a flock of chickens, someone might be willing to trade you a cow for 10 chickens. Someone else might be willing to trade a cow for 5 chickens. The price of a cow in chickens is between 5 and 10 chickens. Add more people willing to trade chickens for cows, and the price will converge to a single number.

What is currency?

Usually this is done in currency; traditionally gold, but now primarily banknotes and coins. The price of a cow in dollars is the amount of dollars someone is willing to trade you for a cow. If you have 10 cows, and someone is willing to trade you $100 for 1 cow, then the price of a cow is $100. If the price of a chicken in dollars is $10, then the price of a cow in chickens is 10 chickens per cow, which matches the price of a cow in dollars. If the price of a chicken in dollars is $20, then the price of a cow in chickens is 5 chickens per cow, which also matches the price of a cow in dollars.

What is time?

It is important to remember, if your wage is $15/hour, then the price of your time, for whatever you do, is $15/hour. If you spend 1 hour doing something, you are giving up the opportunity to earn $15. If you spend 2 hours doing something, you are giving up the opportunity to earn $30. The price of your time is not just the amount of money you earn, but also the amount of money you could have earned if you had spent that time doing something else.

Quality

What is quality?

Value

What is value?

Value is the real metric that should be used to make decisions.