Tuesday, November 15, 2005

Utility and Value

As indicated in an earlier entry, I've been reading Nature's Metropolis. It's an interesting blend of history, economics and geography. But in the closing pages, I was reminded of the concept of utility. Not marginal utility. I'm referring to form, place and time utility. Aside from one of my earliest textbooks, I don't remember running across the concepts very frequently. However I have often referred to it when teaching.

In this context, utility refers to the "usefulness" or "value" that consumers find in objects. The old text I remember classified utility into form, place and time. Basically it said that consumers found a good/service useful because of the form(s) of the object, and/or when and/or where it was available. These qualities made a good/service useful to the purchaser of a good or service.

Nature's Metropolis gives very good illustrations of how time utility can add value to a good to the extent that a higher price is no longer an obstacle. It gives a number of illustrations that can be easily used in the classroom, showing how changing technology (frequently the railroad, but other technology as well) added time and place utility to a good or service, raising its value to the customer, often while reducing the cost.

For the geography and history teacher trying to integrate some economic understanding, the book is a great source. And likewise for the economics teacher trying to provide historical context or integrate geographic learning, the book is highly recommended.

If you have other books that you can recommend that do a good job of illustrating concepts and providing context, let me know.

Posted by TSchilling at 6:57 PM Comments (1)

It would be great to have a list of such books. I had a post about armchair economics reading list at

Posted by: paul at November 19, 2005 1:42 PM

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