Pricing a product can be a thorny issue. Will customers interpret a low price as a bargain, or as a sign of a low quality? Is allowing people to pay what they want for a product a profitable strategy?
Despite Econ 101’s promise of finding the perfect price at the intersection of a supply and a demand curve, pricing advice accounts for countless books, management consulting projects, and Harvard case studies.
But the most fascinating case study about pricing does not have to do with iPhones, cable TV packages, or Uber rides. It concerns the price of a very special commodity: a human child.
Typically individuals only talk about a person’s “worth” in abstract terms. Yet there are situations that demand an exact financial figure. In wrongful death lawsuits, parents of a child who died in an accident will demand compensation from the negligent party. This puts a judge in the unenviable position of having to put a price on the parent’s loss.