Originally Posted by Efrem
Not to derail this too far, there are many threads on this subject, but this reflects confusion between what an award tickets would cost and what miles are worth. It is, and this gives one example, easy to find ways to redeem miles which offer "values" approaching 10¢ per mile - if you calculate "value" by dividing the cost of a ticket into the miles needed for an award. However, unless you would (absent an award) have paid that much of your own money for the ticket, which is hardly ever the case, the true value of the miles is far less. In this example, ask what fare would leave you on the fence between purchasing it and redeemding miles for the award. That will give you the real value of the miles you used.
As Supreme Court justices sometimes do, I concur in part and dissent in part with your opinion about the value of miles.
I agree that one can substantially "overvalue" them by picking the highest [ticket price]/[redeemable miles] ratio when can come up with, especially if they will not be taking down such a ticket. Those very high ratios (I have booked a 13 cpm one) exist because the tickets are priced in the first place with price-insensitive flyers (including award redeeming ones) in mind by the carriers.
I disagree, though, that "unless you would (absent an award) have paid that much of your own money for the ticket, which is hardly ever the case, the true value of the miles is far less." And while it is inarguably logical to say, as you have, the measure should be "what fare would leave you on the fence between purchasing it and redeemding miles for the award," that isn't the way people generally value luxury goods, which these expensive international tickets are.
When I am earning miles, whether by flying or accruing them with a credit card or by other means, I figure their worth at 1.2 cpm, and at some point in the future expect to redeem them for substantially more (never, never less than 1.5 cpm, usually 2 cpm or greater, sometimes much more than 2 cpm). Yesterday, I pulled down 270K miles to send a friend and his family transcon in first, and I expect to replenish my account with the use of credit cards to pay taxes and get double miles (1.25 cpm) for doing it. That should give me back a considerable number of miles at pretty close to my own cap for buying, and also yield 5K of EQM to me and my wife. So, I wouldn't have chosen to pay for those first class tickets (my friend might have done so), but with miles there was a big step up in value to all of us from what the miles were "bought" at and what they are being redeemed at.