Introduction (may be skipped)
Philosophers and theologists have argued for ages about value. It's still the most asked question of any coin forum, so apparently the correct answer hasn't been found yet. As a financial economist, I can give a partial answer.
Anybody who's studied economics in school knows that price is determined by supply and demand. You may remember the X-like graphs, with price determined at the intersection of the two lines. Forget about them. They don't exist in the real world. The theory only works in very special circumstances, called perfect competition. In all other cases, price is simply what you can get for it. Hang on. I'm going to get clearer.
Current coins
The minimal value of coins that are still in circulation (current coins) is the nominal value, the value indicated on the coin. However, that's true only in the area where the coin circulates. If you have been to Thailand on holidays and you have some coins left, don't expect to get even nominal value. Sometimes you can sell such coins to family or colleagues. More often, you're just stuck with them, unless you happen to you meet a collector who wants them. Even in this case, you often do well to get nominal value. Coins that no longer circulate are trade coins or collector's coins
Trade coins
Trade coins are the only coins that have a market price. Most are gold, some silver. They can be bought in large quantities. Their value consists of two tranches: melt value and a margin for tax and profit. Melt value is the value of the metal obtained minus melting cost. Coins that contain important quantities of other metals have a lower melt value, because the metals need to be separated. Nevertheless, melt value depends largely on metal price. The tax rate is set by the government and the profit margin depends largely on the cost of storage and sale. These elements are pretty fixed, so the bottom line is that the value of trade coins fluctuate with metal value.
Trade coins are a way to speculate in metals in small quantities. However, melting cost, tax and margin make them a relatively inefficient instrument. An extreme speculation in metal is a flight to gold and silver in uncertain economic or political times. When people "keep their gold in their mattress", they usually have trade coins. Well-known examples of gold trade coins are British sovereigns, French 5, 10 and 20 francs pieces, Begian 20 franc pieces, Austrian restrikes and the more recent Dutch 10 guilder pieces. Examples of silver trade coins are 5 franc pieces of France, Belgium and other countries, once adhering to the Latin Monetary Union as well as the "Austrian" Maria-Theresa thaler.
Trade coins become collectors coins when their collecting value rises above their trade value. Examples are the gold ducat of te Netherlands and the silver US trade dollar
Collectors coins
All other coins and numismatic items are collector's coins. They do not have a market price. There are simply not enough transactions in the market (in technical terms: the market is not deep enough). The price can be manipulated or influenced when a treasure is found. That does happen more often than you may think. People who control the sale of a treasure like to keep that quiet and sell the lot in small quantities over a long period. The price of a collector's coin is always what you can get for it. It is set by negotiation.
What can you get for it?
The starting point is catalogue value. KM (Standard Catalog of World Coins by Krause and Mishler quotes catalogue prices for the coins of the last 400+ years. This is not a market price, but an estimate of a large number of contributors all over the world. I don't know how they arrive at their estimates. I am a collaborator and I use a large price data base. Others may use experience.
The point is, a catalogue price is NOT a market price. Real market prices fluctuate every minute. KM sets its prices once a year. The catalog price is only a starting point for the nogotiation.
What idrives the negotiation?
Just like other goods we sell by negotiation (e.g. houses), the most important motives are greed and fear. The seller want the highest price, the buyer wants the lowest price and neither wants the other party to break off the negotiation. Greed and fear are sentiment. That takes us back to the philosophers and theologists of the introduction, because they say value is a sentiment. You will be prepared to pay more for the last missing coin in a series, or one that has eye-appeal, or one you once had but lost. You will pay less for a coin you already have, especially if it is difficult to trade with another collector, you will want a margin if you think the coin may be a fake, you will be resigned to pay a little more when buying from a good dealer who guarantees satisfaction and allows returns.
So you can't say anything about value?
Yes, you can. As long as you keep in mind that what can you get for it may be significantly higher or lower than what the previous and next person got. You can approximate the value of a coin with these steps:
1. Determine type, variant (if necessary), date and Mint. If you have asked for a determination on this forum and someone mentions a catalog number you have determined the type. The other information is to determine the exact line in the catalogue.
2. Determine condition (or grade) to find the column in the catalogue. Condition depends on wear. There are some standard conditions. They are, from almost completely worn to "as new": fair, good, very good, fine, very fine, extremely fine and uncirculated. In the US, the standard conditions are further refined. Classical coins come in less conditions. If you cannot determine condition yourself, post a clear picture on this forum. People will help. However, keep in mind that grading is subjective. People very often don't agree on grade.
3. Find the catalogue price. If you don't have the right catalogue, try your local library.
4. Correct for buyer. As a rule of thumb, count with 50% of catalogue when selling to a professional dealer (more for rare or expensive coins, less for common or hard to move coins), 80% of catalogue when selling to a collector and 100% of catalogue when trading for another coin.
5. Correct for sentiment.
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