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Money as an index

In Data Science , "money (price)" is a kind of index. It is measurable . But money is special index.

This page explains about "money". The badness of general index is explained in the page, Isolation of Data, Methods and Indexes .

Quality of the "Money" as an Index

Money has special quality. And we fail our Environmental Assessment .


Money can be exchanged with various goods because the goods can be compared by the quantity of money.

In Environmental Economics , they evaluate the complexities of the environment and the diversity of creartures by money. It means that the way is to solve the environmental problems by exchangeable of money.

Exchange should be done between the things of equal value. In some (or many) case, it is not equal because there are bad prices or bad people. Even if the price is good and the exchange is done good people, there is a case that exchangeable is not formed. The case occurs if time-depended is related.

And there is a deep problem that "The same price means same?". As an index of price, they are same. But the prices of different goods are put by different way. Even if the way is same, they do not study the other way.


Money is useful. But the price is the number like a snapshot. The price is depended on time. Easy example is fresh foods. The values decrease along the time. And if they rot, the price is zero as foods.

Foods may keep exchangeable by exchange the price plates. But the price of the large things, for example "the environment", is not easy to be changed because evaluation of large things is not easy to take.

Value-Depended and Knowledge-Depended

The price is put by the sense of values and the quantity of knowledge. For example, the man who is not interested in eating, the difference of prices of foods are not wide.

Especially, the pricing for the environment is strongly depended on the sense of value and knowledge.


If there is not time-depended but exchangeable. We can re-exchange. It means reversible.

For example, fresh foods are reversible immediately after the dealing. Generally they are non-reversible because they have time-depended.

The environment is also non-reversible. But in many cases, non-reversible is ignored to solve environmental problems easily.

The Index of Money for Environmental Assessment

Environmental Assessment is the method to study the profit from the nature. It is the main purpose. But relationship between us and the environment does not only rely on the profit.

"Profit" is evaluated by the money. But money as an index has problems above. This assessment may cause other environmental problems.

Optimization of Profits from the Environment

"Profit" and "money" are indexes for human beings. It means that we optimize the environment by these indexes.

If the optimization goes well, preferable environment may be built. But we use the system of money perfectly. It causes many social problems. And optimization ignoring the rule of the nature will go badly.

Factor Analysis

The idea to change many indexes into an index "money" is similar the idea of Factor Analysis .

We often use factor analysis to change into more than two indexes. One of the problems of the money as an index is that we change into only one index. If there is a second index, is it Entropy ?

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