Originally Posted by
nkedel
Undoubtedly so. I highly doubt, however, that could be knocked down anywhere close to $4500 ($2250/person.) The voucher exchange isn't the only relevant measure.
Let's say I were to buy 300k US miles.
But, then I decide I could really use AA miles. Using your 10 cpm valuation, I might expect to receive an offer of 30k in exchange from you.
Obviously, that trade would never ever happen. If I really loved AA mies, I
might agree to 250k if I was in a good mood.
Assuming the US miles cost 1.375 cpm, my effective costs for 250k AA is 1.65 cpm. Similarly, if I picked the US miles up for 1.2 cpm (fairly common), AA = 1.44 cpm.
What's more, while the above is a pretty good snapshot of the economics that affect regular people, it's pretty clear that the institutions that drive this business, transact at much lower rates (similar to the difference between Thomas Cook and spot exchange rates, but on a magnified scale).
In any event, the fact that one can also use cash to procure the same goods and services as miles has no bearing whatsoever on what miles are worth, except for the fact that rational economic actors would transact with miles whenever the cash cost is greater than 1.44/1.65 (using the numbers generated in the above examples).
Sure, we could jazz up the analysis to take into account factors like the value of status and the perks that come along with it, but there's no need to enter these topics into the discussion if you just want to know what miles are worth.