Subjective value theory is an economic concept that suggests the value of a good or service is determined by individual preferences and circumstances rather than any inherent qualities. This means that what one person finds valuable, another may not, based on their unique needs, desires, and experiences. For example, a cup of coffee might be worth a lot to someone who is tired, while another person may see it as just a beverage. This theory emphasizes that value is not fixed but varies from person to person, highlighting the importance of personal perception in economic decisions.