We are Consumers
o (People’s wants cannot be changed – should be protecting your
o Some bundle of wants, desires, preferences
o How do we know how much something is worth?
How much are people willing to pay for it?
Based on actual data – not survey
o If nobody buys/sells it – how do you know how much it’s worth?
Ex: Quiet – nobody can buy/sell it
You would know by comparing Bundled Goods
o Compare prices of loud neighborhoods vs. quiet
o Who would like near an airport?
People working at an airport – close in distance to work
People who are deaf – can’t hear the noise (“least sensitive”)
Bundled Goods Problem
o Like with like comparisons
o Other factors driving decisions – desperation for example
o Least sensitive setting the price (their decision is obscured)
o Gaining vs. Giving up
Different expected value of gaining VS giving up.
Some items don’t get traded at all
o How do we assess that? No bundled goods…
What about bundled goods with lives?
How do we assess the value