How do you define "RARE" in numismatics?

At first, I may have easily resorted to looking at the absolute mintage figures (assuming that they are accurate, e.g. not melted down, not destroyed from circulation, homogeneous condition, non-speculative pricing, etc.). However, with a more granular look at what the mintage figures actually means to buyers and sellers, the concept of rare appears to be more complex than simply looking at the mintage figures - enter demand.

For instance, you can be an "official" private mint working out of your garage with very crude instruments and tools to strike a limited edition of 1; but, if no one wants it, then is it truly rare? Absolutely, sure - there's only one in the world, but practically, if no one really wants it when there are so many different offerings at competitive prices, then that one coin is "easily" available to anyone who actually wants it.

In contrast, if the US Mint were to release only 1 million ASE 1 oz BU rounds for the whole of 2017, then isn't that 1 million round mintage rare, if not extremely rare? In 2015, the US Mint produced 47 million ASE 1 oz BU rounds, while their lowest production year for the same strike type was in 1996 with only approximately 3.6 million rounds. If only 1 million were produced, then you'd be hard-pressed to get your hands on one from the US Mint, save for buying from middle man services for exorbitant prices. They'd technically still be available, but practically the high prices would be a barrier to many if not most would-be buyers.

With those scenarios in mind, wouldn't it be appropriate to define what's "rare" as a ratio of mintage to number of collectors seeking to buy that particular coin, at which point prices move beyond 3 standard deviations above the average price for the same design type from past years? I won't get into the math part, but looking at only the ratio figure, if there are 1 million coins for 1 million collectors of that coin, then everyone gets that coin (i.e. not "rare"). If it's 10:1, then it's fairly common. However, if it's 1:10 or 1 coin for every 10 collectors seeking that coin, then at least in theory, you'll have quite a bit of competition to beat - if the price gets too high, it becomes impractical to buy and it may as well not be available at all, since you can't/won't actually own that coin - making the coin extremely rare for "most" people.

The trouble is, it's difficult to calculate the collector base for a given coin. For instance, if there's a mintage of only 100,000 for an early 20th century silver Brazilian coin, how do I figure out how rare that coin really is? I could use market signals such as price, which may seem logical and practical, but I've noticed that many coins are expensive because of their low mintage while lacking demand altogether. The converse is often true, too, especially for modern coins - despite a relatively low mintage, some countries' silver rounds sell out fast at a price competitive with their far more numerous US silver eagle counterpart.

So, is there a rule of thumb collector base figure that you'd say comprise certain type collectors? For example, are there generally 10 million active world silver coin collectors/buyers? Are there 40 million active US silver eagle collectors/buyers for any given coin year? Of course, there are slews of different type collectors, but if there's a general and quick but usually accurate figure I can use, I'd like to figure out which coins I have and want to buy are "actually" rare. I could use the Coin World subscription base, which is less than 100,000, but that figure is probably less than the actual collector base, and may comprise mostly of US and European collectors. Does anyone have an educated guess?

Thanks in advance and thanks for your patience in this long thread!

 

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Still pink in the middle.

 

IMO mintage is the least important aspect in trying to determine what is rare. Survival means far more.

Rare though can have so many different meanings. Overall rarity, condition rarity, toning rarity, hard to find due to extreme popularity ect.

TPG population reports are a pretty decent start for trying to figure out rarity for US coins especially. For World coins depending on the country auctions and sales are probably a better bet overall at this point.

If I am trying to figure out how rare something actually is I start with the TPG pop guides. Yes some coins are counted more than once but that gives you a max to work with for what they graded. Then I look for sales appearances/coins for sale. If I can find 300 examples or something at any given time it really isn't rare IMO. But if I can only find one here or there or sporadic auction appearances I know that if the right one comes along I can probably go ahead and throw the price guides out the window.

 

My basic definition of rare: If I bought it, my wife would pound my skull.

 

Actually a good and interesting question. A 1950-D Jefferson Nickel had 2.6 million minted...key coin, but rare?

 

There is a commonly used rarity scale in numismatics called the Sheldon scale, with rare being defined as 31-75 examples extent. Rare to my mind is one of those overused adjectives for coins, but in general I use the Sheldon scale. Another way I use to define rare is the frequency with which a coin is available for sale, with rare coins coming up to auction maybe once a year.

More of a discussion follows: http://www.thehistorybank.com/perspective/may10_4.html

 

The definition you are attempting to use turns the concept of rarity on its head.

Nothing is rare simply because many people would like to buy it but cannot afford it.

Rarity is not a function of demand, but supply.

Using any reasonable common sense if imprecise definition, no coin which can be bought on demand can remotely be considered rare, such as your hypothetical with the 2017 ASE. Even under your concept, except under the most arbitrary of assumptions, anyone who wants one will be able to buy it. They will just have to pay more.

US collectors have a habit of exaggerating supposed "rarity" more than any others in the world, literally. The most logical reason for it is that since most US coins are actually common to extremely common, they find it necessary to exaggerate the merits of what they collect.

This is why rarity based upon the TPG grade or some other specialization is considered significant. This includes die varieties (even when single date/MM combinations have dozens, hundreds and possibly thousands) and full strikes (such as FS nickels).

I find the concept of relative rarity the most useful, because it is the most objective. The one I use when evaluating rarity is the Judd scale.

 

But isn't that scale only for categorizing mintage figures? So, if I made a 1 oz silver bullion round in my garage and struck a limited edition of 1, then that would be an R10 coin, but no one will want the crudely made, crudely designed silver piece which will probably need to sell for far more than any of the other offerings available to silver bullion buyers. But maybe the various scales get more complex than simply categorizing mintage figures, not sure.

 

Common sense is often rare.

 

But isn't relative rarity a function of demand?

Hence, the inclusion of demand into the static supply based mintage figure to define rarity.

 

Best answer. And here's a link to an interesting article on the Judd scale:
http://www.thehistorybank.com/perspective/may10_4.html

 

I use three concepts of rarity:

Absolute rarity or the number which exist.

Condition rarity using the TPG grade.

The minimal quality or better which most collectors will generally buy.

The third one I have never heard of anyone else using but it's reflective of how people actually collect. For example, though I would never buy one, Mercury dime collectors obviously have no problem buying AG-3 16-D's, as there are thousands in the TPG population reports. Any other (or at least most other) Mercury dime in this grade is "circulated dreck" and its existence isn't really relevant to most collectors of the series..

 

Yes, my question and proposal was referring directly to a relative rarity scale. Though, the Judd scale may be far more refined and accepted than the ratio-based one I present lol. I'll have to look into the Judd scale more.

 

No, it isn't. I understand your point. I just don't agree with it.

 

After reading all the discussion about the 1/10 oz Mercury dimes, including their mintage, their level of detail, and the prevalence of finned rims, I'm still not sure that they're rare -- but they certainly aren't well-done.

 

To clarify further on this relative rarity point that I was getting at, the caveat is that it's a relative rarity for a given condition, among other variables.

 

I suppose that would depend on how "relative rarity" is defined. As you know, I take it to mean the supply available for a given population of active buyers (given a certain grade, among other variables that are controlled for) - if the number of buyers drop, then that ratio increases, meaning that the relative rarity decreases. I'll read about the Judd scale in a bit.

 

If there was a formula or system that consistently worked for coin investing, how long would it work before public use rendered it useless?

 

You're getting worse than me Ken........

 

What you are attempting to describe seems to be somewhat similar to the third definition I included in one of my prior posts here; in the minimum quality most collectors are willing to buy.

If this is your definition, then yes, I think it has relevance. However, this still would not apply to your prior example of the 2017 ASE. In your hypothetical, this coin is scarcer than other ASE and therefore relatively "rare" but it is still meaningless because the 1MM mintage you used precludes no one from buying it. I have never heard of any coin with that supply not being available on demand.

The same is equally true of coins with a combination of much lower mintages but concurrent (very) high survival rates in "high" quality, often as low as in the hundreds. These coins are among the rarest both in absolute numbers and relatively but still not hard to buy. These might not be available on demand but if not, likely within weeks or at most a few months.