28 October 2016
Choosing someone who can represent our community is as difficult as finding the true value of a product. Photo: HKEJ
Choosing someone who can represent our community is as difficult as finding the true value of a product. Photo: HKEJ

How to measure the real value of things

Elections are all about people.

Most voters base their decisions on the story of the candidate, and how they perceive that story.

For example, one candidate has a grassroots background, works hard to become a professional, then runs a small business to support the family.

The candidate promises to do good things and help those in need.

Some would say the story is not impressive enough. The election has become like a beauty pageant, and it’s very difficult to win public support if the candidate does not have a very attractive appearance.

Nevertheless, the tricky part of the election is that the public just need someone they feel would speak for them.

Certainly, some voters would later regret their decision.

In impulsive shopping, you could either get a refund or leave the item aside. However, in an election, choosing a candidate with your emotion may have far worse consequences.

Voters may need to frequently see the wrong candidate they picked in the coming years, or the candidate they chose may do something they do not like.

Actually, what is real value?

When you walk into a fashion store filled with new arrivals, you would be easily tempted to look at the price tag.

Does the price tag really show the real value of the item? Of course not.

The shop may soon offer a discount because of the weak retail market sentiment.

If you are patient enough to wait for the season sale, you could find very good bargains.

If so, what’s the real value of things and how do you measure it?

Generally speaking, value reflects the degree of demand someone has for a certain item.

So you buy an item because you need it or want it. If so, the price you pay for it is its real value.

Our behavior is often related to money. And the price tag usually reflects the value of the behavior.

A well-respected economist once said if someone offers a price for certain product or service, he would know how much that person actually wants or needs that product or service.

It’s true. Price might be the only subjective way to measure value.

Certainly, there are a lot of things that can’t be measured. For example, the disaster at the Chernobyl nuclear power plant in Ukraine has just marked its 30th anniversary.

But it’s almost impossible to measure the value of the lives lost, the massive rebuilding costs, as well as the medical expenditures for the victims of the tragedy.

In that sense, there’s no hard and fast rule for accountants to measure the real impact of various projects.

When the real value has been reflected, policymakers would get their conscience smitten sooner or later.

Horace Ma Chun-fung is the writer of this article, which appeared in the Hong Kong Economic Journal on April 29.

Translation by Julie Zhu

[Chinese version 中文版]

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