The math for how much people want things just got more complicated

Economists have a new way to measure how much people value goods, especially those that create habits. It turns out that how much someone is willing to pay for something depends on whether they've bought it before.

For years, economists assumed people valued things based only on their immediate usefulness. This new model shows that for some goods, past consumption changes how much someone wants it in the future. This means that pricing strategies and welfare calculations for things like coffee or subscriptions might need to be rethought.