this was just something i was pondering over the weekend... (when debating which airline to fly, and whether or not to spend $$ or miles for the ticket)

as a platinum, i earn ~12,500 miles for a transcon trip. If I value the miles at $0.01 apiece, that means I earn $125 in miles on my trip, which could be considered to offset my ticket purchase price. Indeed, if I value miles at $0.02 (I think most people's estimates vary between 1c and 2c per mile, right?) that's $250 in miles.

Assuming I pay ~$300 for the flight, that means after mileage "rebate" the trip cost me between $50 - $175.

I'd like to hear if others consider this issue in the same way, or have another way to think about it.

PS. It seems that mile valuation depends wildly on what you intend to do with the miles. If you have no specific plan for them, you'd probably not even consider them worth 1c.

I like to value them against the biz class quantas award (105k mi) which is a trip I'd otherwise be willing to spend $2,000 on. That calculation yields 2 cents/mile.

Note that I am not valuing the miles against what Quantas (or any other carrier) actually CHARGES for that biz class ticket, because those prices don't really represent any value for anything that I would ever purchase (ie: $7,000+ for an airline ticket). I instead imagine the maximum price I would conceivably pay. That places a cap on the value I give to an airline mile.

A more sophisticated mile valuation also might include risk: risk of airline going bankrupt, risk of award availability not ever allowing use of miles, risk of vacation plans changing, and the time value of money.