# Market-price-based monetization

Upright uses market-price-based monetization (also known as observed preference -based monetization) to monetize benefits for impact categories for which no commonly accepted unit of measure and monetization factor exists, such as Meaning & Joy. 

Market-price-based monetization includes the following steps:

1. **Identification of anchor products:** Identify products for which the price of the product can be used as a proxy of the value the product creates within a specific impact category, and determine their average price.
2. **Relate monetary values of anchor-products to non-anchor products**: Combining (a) estimates on the *relative sizes* of impacts for both anchor and non-anchor products and (b) prices of anchor products, produce estimates on the monetary value of impacts of non-anchor products.

A product can qualify as an anchor product for a particular impact category, if:

* It mainly creates value within that impact category
* The product has negligible external benefits (at least within the impact category of interest)
* Producers of the product use value-priced, rather than cost-based pricing

Examples of products that can and cannot be used as anchor products when monetizing benefits: 

<table><thead><tr><th>Category</th><th width="168.33333333333331">Examples</th><th width="107">Validity</th><th>Explanation</th></tr></thead><tbody><tr><td>Broadly consumed goods</td><td>Literary fiction, music</td><td><span data-gb-custom-inline data-tag="emoji" data-code="2705">✅</span> Yes</td><td>The price reflects the observed preference of a large, representative sample of the general public.</td></tr><tr><td>Luxury goods</td><td>Gold jewelry</td><td><span data-gb-custom-inline data-tag="emoji" data-code="274c">❌</span> No</td><td>The price reflects the observed preference of a small minority. It is not representative of the general public.</td></tr><tr><td>Addictive substances</td><td>Alcoholic beverages</td><td><span data-gb-custom-inline data-tag="emoji" data-code="274c">❌</span> No</td><td>Physical addiction is expected to increase the demand for the product.</td></tr></tbody></table>

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