Principles of Economics by Carl Menger Chapter 3.2C - Influence of the Quality of Goods on Value

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Do all goods of the same type have the same value? Not if their quality is different. In this video, we dive into Carl Menger’s analysis of how the quality of goods influences their value, as explained in Principles of Economics, section 3.2C. You’ll learn why not all goods are created equal, even when they serve similar purposes.
We’ve already seen that value depends on the importance of the needs a good helps satisfy. But what happens when different-quality goods satisfy needs differently? This section adds a layer of depth to the theory of subjective value. Some goods are stronger, more efficient, or offer more enjoyment than others. For example, a high-quality food may provide the same nutrition as a low-quality one, but much more satisfaction. That makes a difference in value.
Menger explains how people match different-quality goods to different needs, using the best goods for the most important purposes, and lower-quality ones for less critical uses—like feeding livestock instead of brewing beer. When two goods meet the same need but with different intensity or satisfaction, people still compare their value—but apply a kind of mental discount to the lower-quality one.
Through everyday examples, this video shows how subjective value remains consistent, even in complex situations involving diverse types and qualities of goods. It’s a must-watch if you want to understand how real-world decisions about value are made.

❓ Questions Answered in This Video
-How does the quality of a good affect its value?
-What are the two types of quality differences in goods?
-Can different goods satisfy the same need equally?
-How do people assign value when goods differ in quality?
-What happens when needs are met in different ways by different goods?
-Why do people match certain goods to specific needs?
-How is value adjusted when using lower-quality substitutes?
-What role does satisfaction play in valuing goods?
-How do we compare goods of different quality?
-Does the principle of subjective value still apply in complex cases?

00:00 - Introduction to the Influence of the Different Quality of Goods on Their Value
00:16 - Human Needs and Goods
00:37 - Differences in Quality of Goods
01:00 - Value of Goods
01:24 - Quality Differences
01:56 - Assigning Value to Goods
02:21 - Example of Oak Bark
02:39 - Complexities of Different Goods
03:12 - Real Life Application
03:36 - Value of Specific Goods
04:09 - Core Rule for Valuing Goods
04:32 - Outro

#SubjectiveValue #ValueTheory #AustrianEconomics