Imputed Value

See: Imputed Interest.

You enjoy spending your weekends spelunking. Each Sunday, you strap one of those miner’s lights to your head and wander through a warren of nearby caves. One day, you discover a skeleton, dressed in pirate garb, clutching a faded piece of parchment in its bony hand. Upon closer investigation, the tattered document turns out to be a map, with a big red “X” stamped in the middle.

You go to auction the map online. What price should you set as a reserve? In other words, what’s the minimum value you should expect for your treasure map?

With these questions, you are engaged in deciphering imputed value.

The phrase describes the estimated value of something where the actual value isn’t known. You're trying to put a specific, quantitative worth on something where there is no direct data either way.

The map might be a meaningless piece of paper. It might point to an immense treasure. It may represent a valuable historical document, regardless of whether a treasure exists or not. To determine its potential value, you have to compare your map with other similar artifacts, implying value based on that research.

In business terms, it can refer to an asset where no previous sale price is available. Think: if HBO wanted to value its rights to stream Game of Thrones reruns. Since the show's relationship to potential future viewers is unique, there's no direct precedent. It just has to look at other content valuations and make an educated guess.

Imputed value also comes up for intangible assets, like brand value or patents.