Din pacate discutia este in limba engleza, cred insa ca multi dintre noi nu au probleme cu asta.
Precum veti vedea opiniile sunt cam aceleasi.
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Donald Fraser
Sr. MES Consultant at Jacobs Consultancy
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Determining the value of a coin
What is the most important factor in determining that value of a coin? Rarity? Condition? Demand? Historical significance? Looking for opinions and any supporting facts you might have.
Posted 2 months ago | Reply Privately
Comments (9)
Eric Van Airsdale
Manager Windows Server Technologies at Eaton Corporation
First, let me ask why you need the value, because the value can be different for different reasons. But all of them involve what someone is willing to pay for it. If you put a value on a coin, and someone is not willing to pay that much, then is that value really accurate?
So the different reasons for values.
Selling: If you're selling the coin, the value is determined by how much the market is willing to pay. i.e. dealers, ebay, private collectors, etc. In my opinion this market is highly driven by perceived rarity and demand. The Lincoln 2009 pennies come to mind. Paying 35 dollars for a 50 cent roll of new pennies is crazy, and driven by perceived rarity.
Buying: If you're looking to buy a coin, you're obviously going to look for the best price. You'll pay more for higher grade coins, and coins that are more rare. However, with that said, rare, low mintage coins that are not in high demand can be found for a bargain.
Insurance: If you're looking to value your coins for an insurance appraisal, then you want to look at retail prices for your coins. Basically, if all of your coins were stolen what is a reasonable price to reacquire those coins? So these retail prices are driven by all of the factors.
To specifically answer your question, I think that each of the factors you mention play into the value. If I had to rate them in order or importance, I would rate them like this:
* Rarity - this is static, and while demand may go up and down, the population of most older coins doesn't often change enough to effect value.
* Demand - Lincoln Pennies.. Enough said..
* Condition - Both eye appeal and grade have to be factored in. I've seen MS60's that had better eye appeal than MS65's. The 65 might be valued higher, but the 60 might be a better looking coin, and could be valued more by some.
* Historical Significance
That's my take on things. Just like value, my comments are subjective to the viewer..
Thanks,
Eric V
http://www.myuscoins.com
Posted 2 months ago | Reply Privately
Alessandro Giarante
CEO at united systems italia s.r.l.
Eric made an excellent survey on the subject, that I totally agree upon except for a couple of issues.
* Rarity. Yes this is mostly static but there are few important exceptions. Opening up of Eastern European countries in the 1990s caused a flood of ancient artifacts, including coins, to come to the Western markets. Some artifacts came through regular trade, many through pillage and plunder, especially from former Yugoslavia. As a result, many Roman coins from late Imperial times that used to be stated as rare or scarce in the literature (such as in RIC, the Roman Imperial Coins series) are now exceedingly common. To a much smaller scale, this can also happen when rare coins from old collections, that may have not appeared in a long time, come back to the market for different reasons. If more coins of a rare type come to the market at more or less the same time, this can result in a big impact on the selling price. Finally, there is a dependency on information available in the literature, which may sometimes be inaccurate or incomplete. Many collectors (even some who are not novice) tend to take information appearing on catalogs and price lists for granted, while often this is wrong or simply out of date. When mistakes are corrected or information is updated, even if there is no real change in the actual rarity of the coin, you can predict an immediate impact on market prices.
* Condition. I would say this is the single most important factor in determining the price of a coin in the current numismatic market. This did not use to be so, but now it is. I came across a few Italian coins catalog from the 1970s, and the price for an UNC coin was on the average 2-3 times the price for the same coin in VF. Now this ratio is up by at least a factor 10. I cannot really pin down the real reasons for this trend, but it is certainly there and not only for the Italian market, which is definitely not the most important coin market in the world.
Just my 2 baiocchi
Regards, A.
Posted 2 months ago | Reply Privately
Donald Fraser
Sr. MES Consultant at Jacobs Consultancy
Thanks for excellent replies. My reason for starting this discussion, I am developing a presentation for a local coin club meeting: however with research the topic has gained complexity. I will share the presentation on linkedin using slide share, you can see my introduction to collecting IHC already posted.
Per the expression the exception proves the rule, I have found instances where a more common coin (same date and series) commands a higher market price than the less common! I have also found several situations where the market price has dropped, with a strong possibility that the rarity has increased at the same time!
I started developing the presentation with the premise, more rare, higher grade equals higher market price, but this does not appear to hold true in all cases.
Thanks for the excellent comments, additional comments are encouraged.
Posted 2 months ago | Reply Privately
Alessandro Giarante
CEO at united systems italia s.r.l.
Best wishes for your presentation and looking forward to see the slides!
Posted 2 months ago | Reply Privately
Eric Van Airsdale
Manager Windows Server Technologies at Eaton Corporation
I agree with all of the comments above. It's really hard to come up with any hard and fast rules regarding the value of a coin, except for what someone is willing to pay for it. But that is based on all of the factors listed above with different weights to each.
I look forward to seeing the presentation.
Also, I am always looking for good articles and content for my website. I would love to post it out there if you're willing to allow it.
Thanks,
Eric V
http://www.myuscoins.com
Posted 2 months ago | Reply Privately
Nicholas Mayhew
Numismatist
"* Rarity - this is static, and while demand may go up and down, the population of most older coins doesn't often change enough to effect value. "
Rarity is NOT static.
If a hoard is discovered and contains numerous examples of what was previously thought to be an extremely rare coin, its rarity will change. Hence, so will its value.
Now how well the market absorbs those new examples, and whether (or not) the price recovers to its old value, is a different matter...
Posted 1 month ago | Reply Privately
Eric Van Airsdale
Manager Windows Server Technologies at Eaton Corporation
I agree with you Nicholas. There have been instances where hoards have been discovered and driven the price down. I would argue that these are exceptions and don't happen very often.
Now I could see a case where a small hoard, which is much more likely, could have an impact on a current market value on a small scale. For example, someone gets an inheritance and it had 20 ungraded 1916 D mercury Dimes. Awesome. So they list all of them for sale at the same time on EBay. The first 5 or 10 may go for a good market rate, but I could see the rate drop after that because the demand has already been fulfilled. This is an example where I could see the rarity being temporarily disturbed, and is probably more likely than finding a large hoard of rare coins.
Just a thought, but I do agree with you that there are cases where rarity is not static, I just think it's the exception rather than the rule.
Thanks,
Eric V
http://www.myuscoins.com
Posted 1 month ago | Reply Privately
Donald Fraser
Sr. MES Consultant at Jacobs Consultancy
Eric and Nicholas,
Thanks for the comments and thoughts on rarity. I have been researching this portion of my presentation during the last month. Rarity is a key component to price, assuming there is a sufficiently large market (buyers). There are some very rare and extremely rare pieces that trade at low dollar amounts because the size of the collector market (the buyer base) is limited.
Within a given series, the rare pieces generally command higher prices. but not always, I have found a few examples where the higher mintage commands a higher price. This situation can be seen in US series that include CC mintage coins. The CC coins are collected by CC collectors, series collector, and occasionally topical collectors.
The deeper the look at rarity the more ripples appear.
Posted 1 month ago | Reply Privately
Harvey Utech
Coach, Teacher & Translator
Donald--
A couple of comments on your question from a different point of view, if I may.
Would you agree that a coin's value is reflected in its price, as suggested by Eric above and as determined by the printed and online pricing guides that are available?
If you accept that, then demand is already reflected in the price and is not an independent determinant of price/demand in the same way that rarity, condition and historical significance are.
Data mining techniques (see Wikipedia for an explanation of the technique) could then determine the relative importance of each of these factors in determining price/value. I would argue that metal and age of the coin ought also be considered in determining price. And I think I could also make a case for the designer of the coin.
We have a lot of data available in print and online on coin prices. Condition can be quantified thanks to the Sheldon Scale. Rarity can be quantified in terms of the number of coins known (or knowledgeably estimated) to exist. The metal of which the coin is made is easily determined. I think historical significance would be problematic to scale and so I wonder if age of the coin (i.e. date of coinage) might not be a reasonable substitute, Would you agree? And I might also want to add the name of the designer to the other criteria. And perhaps those of you more knowledgeable than I in numismatics would want to include still other criteria.
Properly done, data mining would allow one to estimate the relative importance of each of the chosen factors in determining the price of a coin. Then, you could determine whether Alessandro is correct in his assertion above, that condition is the most important determinant of price.
Still more important and interesting, one could evaluate any given coin about which the above parameters are known and determine what its price "should" be. It would provide collectors with a new tool in the search for numismatic bargains would provide dealers with a new way to determine fair value.
I look forward to further comments.
Harvey
Posted 1 month ago | Reply Privately
Donald Fraser
Sr. MES Consultant at Jacobs Consultancy
Thanks to all for the comments, several drove the research into new areas, I have posted a presentation based on my findings. The price guide reflecting demand angle was most interesting. I am now diving deeper into demand. I have yest to find any database owner that will share, or provide me query access to facilitate data mining...oh well
Posted 3 days ago | Reply Privately
