First, we have income miles vs rebate miles. Income is when you park your money and don't have to spend anything to get miles. Rebates are when you have to spend to earn miles.
Originally Posted by
Andy2
How could someone write an article on this subject and not bring up the concept of the fair market value of a mile?
For me, I think they should be valuated at whatever the consumer can redeem them for in cash. For example, 25,000 ThankYou points only gives you $175 cash. Make them 0.7 cents per points then.
The AAMiles are much harder to valuate because you don't necessarily have a clear redemption value. Still, I don't they 2.5 cents per mile is right... At most, perhaps 1 cent per mile.