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<p>[QUOTE="iPen, post: 2498477, member: 69760"]Rarity by definition and itself, yes, I agree with you that it's a function of supply.</p><p><br /></p><p>However, I utilize rarity into a ratio that compares supply and demand, to see if supply or demand outpaces one or the other (or if they're even). So it may be more accurate to refer to it as a "rarity-to-sales ratio/rate" or something of that nature. It's sort of like taking your example of folks looking at how often it shows up, and knowing how "rare" something is, but it's a bit different from that. It looks at how relatively available something is if I wanted to buy something right now "regardless" of supply.</p><p><br /></p><p>For example, the 1942-P US penny proof coin has a ratio of 2.316, which suggests that it's available if you want to buy it, since buyers aren't purchasing them at the same rate they're supplied. In the last few months or so of eBay data, there were a total of 28 of these proofs supplied, while 18 of them sold. Even though there are only 10 for sale now, they're not being snatched up as quickly as the 1949 Mexico Onza example mentioned earlier, which has a much lower ratio of 1.1 despite its much higher mintage of 1 million (vs. the 1942 US penny's 21,100 mintage figure).</p><p><br /></p><p>A ratio of 2 would suggest that demand and supply are met equally. If the ratio is even higher (say, 4) and continues to rise, then that coin's price should drop. Otherwise, it's overpriced. In another example, in terms of the ratio, the 1893 Isabella quarter has many overpriced listings, with a ratio of 2.788. Even if hypothetically there are high grade examples in, say, MS-68, but no one wants it and it doesn't sell, the practical suggestion by the ratio is that it's overpriced, at least in the short term.[/QUOTE]</p><p><br /></p>
[QUOTE="iPen, post: 2498477, member: 69760"]Rarity by definition and itself, yes, I agree with you that it's a function of supply. However, I utilize rarity into a ratio that compares supply and demand, to see if supply or demand outpaces one or the other (or if they're even). So it may be more accurate to refer to it as a "rarity-to-sales ratio/rate" or something of that nature. It's sort of like taking your example of folks looking at how often it shows up, and knowing how "rare" something is, but it's a bit different from that. It looks at how relatively available something is if I wanted to buy something right now "regardless" of supply. For example, the 1942-P US penny proof coin has a ratio of 2.316, which suggests that it's available if you want to buy it, since buyers aren't purchasing them at the same rate they're supplied. In the last few months or so of eBay data, there were a total of 28 of these proofs supplied, while 18 of them sold. Even though there are only 10 for sale now, they're not being snatched up as quickly as the 1949 Mexico Onza example mentioned earlier, which has a much lower ratio of 1.1 despite its much higher mintage of 1 million (vs. the 1942 US penny's 21,100 mintage figure). A ratio of 2 would suggest that demand and supply are met equally. If the ratio is even higher (say, 4) and continues to rise, then that coin's price should drop. Otherwise, it's overpriced. In another example, in terms of the ratio, the 1893 Isabella quarter has many overpriced listings, with a ratio of 2.788. Even if hypothetically there are high grade examples in, say, MS-68, but no one wants it and it doesn't sell, the practical suggestion by the ratio is that it's overpriced, at least in the short term.[/QUOTE]
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