CHOICE membership

Cost, price & value


#1

As consumers, what are we paying for and why?

The need to explain the difference set me thinking; what are cost, price and value? Most of us seem to conflate cost and price. Some evidently have little concept of value.

To me:

  • Cost is the sum total of the value of all inputs.
  • Price is what is taken away (in Capitalism, generally expressed in terms of money, but could be other things like environmental harm).
  • Value is what the rearrangement of inputs adds (to society, community, environment, economy, individual or whatever).

Deliberately broad and vague (and somewhat circular), but the best I can do.

And no, I’m not referring only to the NBN.