Can we Quantify Value?

[coberst]

Can we Quantify Value?

“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of science.”– Lord Kelvin

Lord Kelvin is making a value judgment. Has his value judgment advanced to the state of being a science? We do not have a physical standard for such a measurement so his judgment of this matter is unsatisfactory, at least in his valuation of judgment.

We have developed standards for quantifying certain physical parameters. We have standards for distance, weight, and time. The physical sciences utilize these standards for measuring things that have length, gravity, and duration. We have not developed similar quantifying standards for many other things that are of value to us. This may mean that the measurement of these values is unsatisfactory but again this is a value judgment, which is, as Lord Kelvin says, unsatisfactory. However unsatisfactory it does not mean that we cannot develop a disciplined, empirical, and systematic study of our values, that is to say we can develop a science of any domain of knowledge.

The quantification of qualities is useful especially in qualities that seldom change but, however unsatisfactory, it does not mean that we cannot develop a disciplined, empirical, and systematic study of our values.

Many of my teachers in grade school gave us report cards with number rather than letter grades. Since this is a quantification of value is it better than a letter grade? The quantification of an assessment of value seems to be an arbitrary assignment of the degree of value in which a judgment is held.

Can you quantify beauty, right, wrong, evil, good, sanity, aptness, inaptness, IQ (evidently we have developed a standard here), sophistication, democracy, freedom, etc?

[ChunTzu]

Originally Posted by coberst

...The quantification of an assessment of value seems to be an arbitrary assignment of the degree of value in which a judgment is held.

Can you quantify beauty, right, wrong, evil, good, sanity, aptness, inaptness, IQ (evidently we have developed a standard here), sophistication, democracy, freedom, etc?

To this, I unfortunately reply...CHA CHING! $$$$

We say that these vague terms, which you aptly point out, are perhaps valueless, which is to say that the notion of value transcends these qualities. However it would unfortunately be fairly simple to define a system for quantification based on existing monetary value structures- at least in a capitalist society.

At least, that is what I would guess.

[Turtle]

Originally Posted by coberst

Can we Quantify Value?
...
Can you quantify beauty, right, wrong, evil, good, sanity, aptness, inaptness, IQ (evidently we have developed a standard here), sophistication, democracy, freedom, etc?

Yes. We can and we do.

Actuary - Wikipedia, the free encyclopedia

Originally Posted by wiki

An actuary is a business professional who deals with the financial impact of risk and uncertainty. Actuaries have a deep understanding of financial security systems, their reasons for being, their complexity, their mathematics, and the way they work (Trowbridge 1989, p. 7).

Actuaries evaluate the likelihood of events and quantify the contingent outcomes in order to minimize losses, both emotional and financial, associated with uncertain undesirable events. Since many events, such as death, cannot be totally avoided, it is helpful to take measures to minimize their financial impact when they occur. These risks can affect both sides of the balance sheet, and require asset management, liability management, and valuation skills. Analytical skills, business knowledge and understanding of human behavior and the vagaries of information systems are required to design and manage programs that control risk (Be An Actuary 2005). ...

[coberst]

Turtle

Do you mean to say that actuaries can quantify beauty, right, wrong, etc?

[Turtle]

Originally Posted by coberst

Turtle

Do you mean to say that actuaries can quantify beauty, right, wrong, etc?

Yes Sir; that's what I meant to say. They can and they do.

[coberst]

Originally Posted by Turtle

Yes Sir; that's what I meant to say. They can and they do.

Oh, I see what you mean; a woman can get an insurance policy on the possibility that her beauty might be damaged.

[Turtle]

Originally Posted by coberst

Oh, I see what you mean; a woman can get an insurance policy on the possibility that her beauty might be damaged.

Indeed. Actuary work is not confined to insurance however, and assigning value to immaterial 'things' is not limited to actuaries as courts also make these value judgments. Why even the Pentateuch with its eye-for-an-eye is a record of the valuation of these immaterial things.

Exodus 21:23-25
23 "But if there is any further injury, then you shall appoint as a penalty life for life, 24 eye for eye, tooth for tooth, hand for hand, foot for foot, 25 burn for burn, wound for wound, bruise for bruise.

I would like to think that accounting has played some role in showing the societal net loss for such brutal admonitions. You know, some bean counter showing the King how many man hours lost to floggees unable to work or such a matter.

[coberst]

Turtle

Is a standard necessary for measurment and thus for quantification for an actuary? Where are these actuary standards kept so as to protect their legitimacy?

[Turtle]

Originally Posted by coberst

Turtle

Is a standard necessary for measurment and thus for quantification for an actuary? Where are these actuary standards kept so as to protect their legitimacy?

I don't know what you mean there, but I'm not an actuary. If we are lucky maybe one will drop in to comment.

The gist is that we the people do quantify values and from there on its just squabbling about whether the quantification is correct.