Economic Value

Economic value is the value of a good or service, taking into account the opportunity costs of that good or service.

Opportunity costs are trade-offs: essentially, all the options you’re giving up by choosing the option you did. When people want to “keep their options open,” it means they’re afraid of committing to one option, because that closes the door to all the others.

Economic value takes into account market value (how much something costs), but it goes beyond that. Market value says to you, “That chocolate bar costs $3” while economic value says “That chocolate bar costs $3, plus more fat on your bod, plus a shot of serotonin and endorphins, plus three fewer dollars you could be spending on something else...like saving up for some headphones, or buying even better chocolate.”

No wonder economics is the dismal science...it makes you start regretting your choice even before you made it. But looking at all your options before you commit is rational, right?