I work in investment banking, and regularly do corporate valuation. Although points & miles is different, the approach is similar.

Most people understand the concept of "intrinsic value", that is, to most people a $10k flight is not really worth $10k. This is similar to sticker price on an overpriced car - some people will buy it, but most will buy it closer to its true value. This concept is applied to miles: Most people wont purchase miles at 3.0 cents/mile, but might do so at 1-1.5.

The concept that most people don't understand in valuation is Opportunity Cost. Simply put, this is the next-best alternative you forgo. In other words, let's assume you value American Airlines miles at 1.5 cents. If you have a credit card that earns you 1 mile per dollar, then you are actually not maximizing your utility, since there are credit cards out there that will earn you 2% on everything. You are essentially "losing" 25% of your maximum utility. In other words, assuming no sign-up bonuses, if you don't value any of your points higher than 2%, your opportunity cost is higher than the value you are deriving from spend.

Another point is "relative utility". This is similar to the example of a bottle of water. You can buy a case of water for $4 per 20, or roughly $0.20, $1 at a mall, or $5 at a sporting event. Let's assume this is the exact water bottle. Why do we pay literally 25x more at a sporting event for the same product? It's because of relative utility. We know it isn't "worth" $5, but at that moment, the value you get from it is. The way this relates to points is this: I won't ever use additional $ or points on a suite if I am staying in a hotel alone, but if my girlfriend comes with, the value of a suite goes up, as I am willing to part with my $ and/or points for the upgrade.

I have a pretty detailed excel model where I have all of my valuations, albeit subjective valuations. Although I have gotten amazing redemptions, keep this in mind: Your points values for redemptions should never exceed the cost at which you can buy them directly

It is not correct to say "I got 5 cents per mile on that last minute United miles redemption". No you didn't because no one would ever pay more than the cost to purchase them outright.