How to Measure Anything: Finding the Value of "Intangibles" in Business, Second Edition

Chapter 11. Preference and Attitudes: The Softer Side of Measurement

The brand damage example in Chapter 10 is one instance of a large set of subjective valuation problems. The term "subjective valuation" can be considered redundant because, when it comes to value, what does "objective" really mean? Is the value of a pound of gold "objective" just because that is the market value? Not really. The market value itself is the result of a large number of people making subjective valuations.

It's not uncommon for managers to feel that concepts such as "quality," "image," or "value" are immeasurable. In some cases, this is because they can't find what they feel to be "objective" estimates of these quantities. But that is simply a mistake of expectations. All quality assessment problems—public image, brand value, and the like—are about human preferences. In that sense, human preferences are the only source of measurement. If that means such a measurement is subjective, then that is simply the nature of the measurement. It's not a physical feature of any object. It is only how humans make choices about that thing. Once we accept this class of measurements as measurements of human choices alone, then our only question is how to observe these choices.

Observing Opinions, Values, and the Pursuit of Happiness

Broadly, there are two ways to observe preferences: what people say and what people do. Stated preferences are those that individuals will say they prefer. Revealed preferences are those ...