Originally Posted by
hawkandhoo
hindukid has a valid point about how people need a baseline for comparison when making day to day decisions (purchase vs. redeem), but overall, I tend to view this issue more like Stevens397 and Andy2, because after skimming this thread and others like it, I don't understand the thought process of people who live in a fantasy world and assign arbitrary, artificial values to ticket prices.
The example of choosing between 25K miles or $600 is real, and one that people like us confront all the time. It makes sense to me that someone would want to have a per mile "value" in mind when making that decision. But when folks say that they value a $10,000 (or $26,000!!!) F ticket at $2,000 because that's all they would be willing to pay for it, then that paradigm breaks down, because they aren't talking about real world choices any more -- they will never be able to buy that ticket for $2,000. Under these circumstances, the decision boils down to, do you want to redeem the miles and take the trip or don't you?
The price you would pay for that F ticket is a real world decision. I can give you a concrete example. I just redeemed a marriott travel package in which I received 120K miles. I could send those miles to Southwest or United or AA.
If I send them to Southwest I get 120K points which is redeemable for $2000 worth of flights. I also get a companion pass which is valid until Dec 31, 2014. I estimate that the companion pass will save me $2500 over the two years. So in all I estimate that the 120K southwest points will save me $4500. This is cold hard cash that I would have spent on various domestic trips over the next two years.
I could instead redeem for 1 F ticket to Europe had I transferred to UA and AA. I am making a calculated decision that the F ticket is worth less than $4500 to me. Without figuring out how much those miles are worth I would not know whether to redeem my marriott points for United or for southwest. You have to look at things in terms of what they are worth to you, not what they cost on the retail market.