<p>According our current best understanding of value, value is driven by marginal utility and thus fully subjective given by preferences that each individual has (see Mankiw Principles of Economics ch 7 and 21 for broader discussion of this).</p>
<blockquote>
<p>Why can a random vtuber just with a 3d model can make as much money in an hour what a PhD neurosurgeon makes in a whole year (not even counting decades of study, hard work and money spent in education).</p>
</blockquote>
<p>First value is slightly different concept that just earning money.  For example, a gangster can extract money from people without providing any counter-value to people who are being mugged.</p>
<p>However, assuming the transactions are voluntary and not forced, it is  because in a year subjectively the 'vtuber' (whatever that is) provides more subjective gratification in a year than the PhD neurosurgeon does.</p>
<blockquote>
<p>Why businesses that solve real problem for (example oceancleanup or teamtrees project) doesnt make even a tiny fraction of what one of recent marvel movie made.</p>
</blockquote>
<p>Again because people subjectively enjoy going to see those movies. If people would line up to go to cinemas to watch recordings of this oceancleanups as much as they line up for a spiderman no way home then the oceancleanups could charge their customers as much.</p>
<p>Also, here there is an additional layer of complexity. Ocean cleaning is a public good because clean ocean is non-excludable good. One could also argue it is mostly non-rivalrous due to its size  making it a public good. In that case there might be underfinancing also due to free rider problem because perhaps people value clean oceans greatly but they want to free ride on the efforts of people who clean it without themselves contributing to the clean up.</p>
<blockquote>
<p>Why tinder is worth 15 times more than largest solar panel company in the world?</p>
</blockquote>
<p>First of all <a href="https://finance.yahoo.com/quote/MTCH/" rel="nofollow noreferrer">tinder market cap is</a>:</p>
<pre><code>$32.369 billion
</code></pre>
<p>The largest solar manufacturer is longi solar <a href="https://finance.yahoo.com/quote/601012.SS/?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAABqQcZKJK37YET6RlhVGcYU-YU6usMYmo2gpo-H_Ya2rPrjXZyyFo40ByrdCygU0yW8eAJJ83Ayx6jdhttpGbBy536KiW2LEHMK-5GdrDjscGXI8lAfjLHUkvcCKW-XWuBQg2MrGo_8E4ZZkYCohy-PpEL1AipTegjMU8pQP7e2L" rel="nofollow noreferrer">with market cap of</a>:</p>
<pre><code>396.336 billion Yuan or $62.29 billion dollars at current market exchange rate.
</code></pre>
<p>So it is simply not true that tinder is worth 15 times more than the largest solar panel company. One should never argue from false premises.</p>
<p>This being said, the reason why the <strong>solar manufacturer</strong> is the more valued company is because investors subjectively believe that the solar manufacturer has larger value than tinder.</p>
<p>The subjective valuations of companies ultimately depend <em>mostly</em> on the companies' profitability. However, I say mostly because ultimately all value is subjective and derived from people's preference, just in case of investors it is reasonable to assume they have strong preference for return on their portfolio and for that company has to be profitable. Of course there might be some investors investing in ethical stocks despite profits or investing just for the fun because those are their preferences.</p>

CC BY-SA 4.0
2022-02-09T22:14:39.457Z
"it is because in a year subjectively the 'vtuber' (whatever that is) provides more subjective gratification in a year than the PhD neurosurgeon does." What do you mean by this? say there are $n$ people who like the "vtuber" and $1$ person who needs intervention by the neurosurgeon, it is not sure that the sum of the subjective utilities of the $n$ persons will be greater than the utility gained for the ill person from receiving intervention, or am I wrong?
Tortar
CC BY-SA 4.0
2022-02-09T22:37:02.343Z
@Tortar I did not used precise but more technical language because OP is clearly non-economist, but based on a revealed preference principle market prices, assuming competitive markets etc, reveal marginal social value  of a task. Assuming the V tuber earns 150e per hour and neurosurgeon 100e per hour, on a margin V tuber produces 150e of value to society and neurosurgeon 100e value to society on a margin as subjectively valued by consumer preferences captured by the demand
1muflon1
CC BY-SA 4.0
2022-02-09T17:12:16.657Z
2022-02-09T17:27:33.940Z
2022-02-09T17:27:33.940Z
1muflon1
<p>I have been taught by peers that the bigger problems you solve the more you will be economically valued. But my experience so far seems to say something opposite.</p>
<p>Why can a random vtuber just with a 3d model can make as much money in an hour what a PhD neurosurgeon makes in a whole year (not even counting decades of study, hard work and money spent in education).</p>
<p>Why businesses that solve real problem for (example oceancleanup or teamtrees project) doesnt make even a tiny fraction of what one of recent marvel movie made.</p>
<p>Why tinder is worth 15 times more than largest solar panel company in the world?</p>
<p>I do not mean to criticize any profession or business model. I am genuinely curious, If problem solving doesn't drive value of a business then what does?</p>

CC BY-SA 4.0
2022-02-09T16:05:48.053Z
Hi! How do you define "bigger problem"? If I mitigate global warming by 0.1 degrees (C) for a million people, is that better than performing brain surgery on someone and saving their life? How about making a million people laugh?
Giskard
CC BY-SA 4.0
2022-02-09T16:06:35.907Z
Did you take chance into acount? The median neurosurgeon makes waaaaaaaaaaaaaaay more than the median youtube poster.
Giskard
CC BY-SA 4.0
2022-02-09T16:08:06.293Z
Also, it seems like you really prefer quality over quantity. If I show you a super nice person/environmental activist, will you transfer half your assets to them? If not, why should other people give them monetary value?
Giskard
CC BY-SA 4.0
2022-02-09T16:08:48.523Z
So, to summarize: are you asking why market valuation does not reflect your personal values? If not, what exactly are you asking? Please [edit your question](https://economics.stackexchange.com/posts/50365/edit) to clarify.
Giskard
CC BY-SA 4.0
2022-02-09T16:11:20.600Z
P.s.: Overly general rules like "*the bigger problems you solve the more you will be economically valued*" are usually false, especially if the definitions are murky.
Giskard
CC BY-SA 4.0
2022-02-09T16:34:07.813Z
Hi Giskard. This is exactly what I am trying to understand. Why making a million people laugh is better than saving a life? What are the factors decide that? Could you at least refer me to resources, I will be happy to learn more myself.
CopilotSimp
CC BY-SA 4.0
2022-02-09T16:35:15.223Z
By "better" here I mean more monterily valued.
CopilotSimp
CC BY-SA 4.0
2022-02-09T16:39:46.057Z
Please do not clarify in the comments, but go over your question and [edit it where necessary](https://economics.stackexchange.com/posts/50365/edit).
Giskard
<nonexpert><price>
Does problem solving drive economic value?
CopilotSimp
# Does problem solving drive economic value?

(Asked by: username_0 on 2022-02-09)

I have been taught by peers that the bigger problems you solve the more you will be economically valued. But my experience so far seems to say something opposite.

Why can a random vtuber just with a 3d model can make as much money in an hour what a PhD neurosurgeon makes in a whole year (not even counting decades of study, hard work and money spent in education).

Why businesses that solve real problem for (example oceancleanup or teamtrees project) doesnt make even a tiny fraction of what one of recent marvel movie made.

Why tinder is worth 15 times more than largest solar panel company in the world?

I do not mean to criticize any profession or business model. I am genuinely curious, If problem solving doesn't drive value of a business then what does?

**Tags:** nonexpert, price

> **Comments:**
> **username_1**: Hi! How do you define "bigger problem"? If I mitigate global warming by 0.1 degrees (C) for a million people, is that better than performing brain surgery on someone and saving their life? How about making a million people laugh?  
> **username_1**: Did you take chance into acount? The median neurosurgeon makes waaaaaaaaaaaaaaay more than the median youtube poster.  
> **username_1**: Also, it seems like you really prefer quality over quantity. If I show you a super nice person/environmental activist, will you transfer half your assets to them? If not, why should other people give them monetary value?  
> **username_1**: So, to summarize: are you asking why market valuation does not reflect your personal values? If not, what exactly are you asking? Please [edit your question](https://economics.stackexchange.com/posts/50365/edit) to clarify.  
> **username_1**: P.s.: Overly general rules like "*the bigger problems you solve the more you will be economically valued*" are usually false, especially if the definitions are murky.  
> **username_0**: Hi username_1. This is exactly what I am trying to understand. Why making a million people laugh is better than saving a life? What are the factors decide that? Could you at least refer me to resources, I will be happy to learn more myself.  
> **username_0**: By "better" here I mean more monterily valued.  
> **username_1**: Please do not clarify in the comments, but go over your question and [edit it where necessary](https://economics.stackexchange.com/posts/50365/edit).  

---

## 1 answers

### Answer by username_2 on 2022-02-09. Score: 1 | Accepted answer

According our current best understanding of value, value is driven by marginal utility and thus fully subjective given by preferences that each individual has (see Mankiw Principles of Economics ch 7 and 21 for broader discussion of this).

> Why can a random vtuber just with a 3d model can make as much money in an hour what a PhD neurosurgeon makes in a whole year (not even counting decades of study, hard work and money spent in education).

First value is slightly different concept that just earning money. For example, a gangster can extract money from people without providing any counter-value to people who are being mugged.

However, assuming the transactions are voluntary and not forced, it is because in a year subjectively the 'vtuber' (whatever that is) provides more subjective gratification in a year than the PhD neurosurgeon does.

> Why businesses that solve real problem for (example oceancleanup or teamtrees project) doesnt make even a tiny fraction of what one of recent marvel movie made.

Again because people subjectively enjoy going to see those movies. If people would line up to go to cinemas to watch recordings of this oceancleanups as much as they line up for a spiderman no way home then the oceancleanups could charge their customers as much.

Also, here there is an additional layer of complexity. Ocean cleaning is a public good because clean ocean is non-excludable good. One could also argue it is mostly non-rivalrous due to its size making it a public good. In that case there might be underfinancing also due to free rider problem because perhaps people value clean oceans greatly but they want to free ride on the efforts of people who clean it without themselves contributing to the clean up.

> Why tinder is worth 15 times more than largest solar panel company in the world?

First of all [tinder market cap is](https://finance.yahoo.com/quote/MTCH/):

```
$32.369 billion

```

The largest solar manufacturer is longi solar [with market cap of](https://finance.yahoo.com/quote/601012.SS/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAABqQcZKJK37YET6RlhVGcYU-YU6usMYmo2gpo-H_Ya2rPrjXZyyFo40ByrdCygU0yW8eAJJ83Ayx6jdhttpGbBy536KiW2LEHMK-5GdrDjscGXI8lAfjLHUkvcCKW-XWuBQg2MrGo_8E4ZZkYCohy-PpEL1AipTegjMU8pQP7e2L):

```
396.336 billion Yuan or $62.29 billion dollars at current market exchange rate.

```

So it is simply not true that tinder is worth 15 times more than the largest solar panel company. One should never argue from false premises.

This being said, the reason why the **solar manufacturer** is the more valued company is because investors subjectively believe that the solar manufacturer has larger value than tinder.

The subjective valuations of companies ultimately depend *mostly* on the companies' profitability. However, I say mostly because ultimately all value is subjective and derived from people's preference, just in case of investors it is reasonable to assume they have strong preference for return on their portfolio and for that company has to be profitable. Of course there might be some investors investing in ethical stocks despite profits or investing just for the fun because those are their preferences.

> **Comments:**
> **username_3**: "it is because in a year subjectively the 'vtuber' (whatever that is) provides more subjective gratification in a year than the PhD neurosurgeon does." What do you mean by this? say there are $n$ people who like the "vtuber" and $1$ person who needs intervention by the neurosurgeon, it is not sure that the sum of the subjective utilities of the $n$ persons will be greater than the utility gained for the ill person from receiving intervention, or am I wrong?  
> **username_2**: @username_3 I did not used precise but more technical language because OP is clearly non-economist, but based on a revealed preference principle market prices, assuming competitive markets etc, reveal marginal social value  of a task. Assuming the V tuber earns 150e per hour and neurosurgeon 100e per hour, on a margin V tuber produces 150e of value to society and neurosurgeon 100e value to society on a margin as subjectively valued by consumer preferences captured by the demand  

---

