Hi, this is Frank here with a new book.
Have you ever wondered how much you are worth if you were put on the market? It has become a habit of people to put prices on everything, and when I say everything I literally mean everything. The book The Price of Everything addresses this phenomenon and digs deep on the factors that influence the choices we make regarding matters that are not traditionally thought to have prices
In the book, Eduardo Porter gives numerous examples and cases to illustrate and analyze the factors that influence people’s decisions. Making rational decisions is everything in economics. Nevertheless, there are times when people make decisions that seem to be far from rational. For instance, people will travel across town to save $20 off a $100 sweater but not save $20 off a $1,000 computer which is an odd choice considering that both actions are priced equally. In this case, we can assume that people put more value on computers than sweaters and are willing to pay more, or that $20 reduced $100 seems like a better opportunity compared to $20 reduced from $1000.
Eduardo Porter expands to discuss about prices on matters that are not visible. For example, the value of women are different from country to country. In the case of India, baby boys are more preferred than baby girls because the family will be obligated to pay huge dowry to the groom’s family in the future. Additionally, while sons can share the burden of supporting the family, the daughter can not do as much. Thus, due to the high price of raising baby girls, the gender imbalance is India is higher compared to other countries.
There is more than just supply and demand pulling the strings on prices. The decisions we make are driven more by the situation and the opportunity cost we face rather than finance and logic. Economists and experts constantly try to analyze the reasons behind the economic decisions people make, and if you are expecting an answer to this by reading the book, you will be disappointed. Nevertheless, Eduardo Porter’s book gives a thorough insight into the implicit and explicit factors that contribute to prices and the role it takes in our lives. As quoted in the book, “Prices do a pretty decent job organizing the world, much of the time,” prices dominate our world. However, do not forget that when such prices fail, it can shake the root of your life and the world.