Just Price and Fair Value: A Null Hypothesis Supported

Abstract

This paper seeks answers to the question of where did the idea of the fairness in fair value originate. It is possible that there is some inheritance of the moral approbation inherent in the medieval idea of the just price. However the context and assumptions of the two notions are so very different that the journey from just price to fair value over some eight centuries cannot be just assumed to be along one single unbroken line. This article summarises the process of dilution of the medieval idea of just price and the judicial development of the modern idea of fair value and discusses the extent to which the former can be shown, if at all, to have germinated or nurtured the early development of the latter. The conclusion is tentatively drawn that the two notions lack detectable interaction or association historically and the whiff of moral approbation that both enjoy is entirely coincidental.