Economists say that value is subjective. But what do they mean by that? Why is this concept so significant? In the latter part of this study, I will explain and give an example about this concept by comparing a Forever21 dress and a Femme dress. Most people would value these dress differently, and would be willing to pay more for one than the other. Yet the dresses are identical in terms of the labor and resources required to produce them. So what accounts for the difference in value? As I explain, the key factor is consumer preference. This is the first monographic study entirely devoted to the study of the subjective valuation theory. The explanation of all economic activity that takes place in the market economy ultimately rests on the subjective theory of value. Valuation consists in preferring a particular increment of a thing over increments of alternative things available; the outcome of valuation is the ranking of definite quantities of various goods and services with which the individual is concerned for purposes of decision and action.
II. Specific Objective
The following are the objectives of this study:
• To apply the subjective valuation theory on my personal life • To better understand subjective valuation theory by applying it • To know the definition of subjective valuation
III. Concept/Theory/Model Utilized
Subjective Valuation is basically defined as the amount of the consumer is willing to pay. It is based upon your own feelings, tastes and opinions. It identifies worth as being based on the wants and needs of the members of a society, as opposed to value being inherent to an object. It holds that to possess value an object must be useful, with the extent of that value dependent upon the ability of an object to satisfy the wants of any given individual. The subjective theory of value is a doctrine of value which advances the idea that the value of a good is not determined by any...