Coin Values

The most common question I hear in collecting is "what is my coin worth?"

The simple answer is "the highest amount anyone is willing to pay for it". However there are no simple answers to determining a coin's value. Every coin, categorized by the year mint, type and grade, has its own numismatic value. Coins with little or no numismatic value are worth the face value or the value of its metal content. Other coins which have a higher numismatic or extrinsic value are more difficult to assign value to.

I have referred to coin collecting as the hobby of economists. Many of the basic principles in economics apply to coin collecting more so than any other hobby. The fact collectors have faith in the monetary system behind the coins you collect support the extrinsic value of those coins. Economic Principles such as supply and demand, perfect competition and scarcity should be understood in order to understand what makes numismatic value.

First lets look at market value and its driving forces:

• Rarity How many specimens exist of each type, year, mint and grade. The fewer the specimens the greater the value. Unfortunately it is not always known how many specimens do exist. Production figures from the mint set the original number of coins produced. Over time coins are lost, destroyed or become worn. This is where supply and demand play the greatest role in determining value.
• Grade The higher the grade the higher the numismatic may be. Grading is highly subjective even among experts. Sometimes one grade point translates a value difference of hundreds or even thousands of dollars.
• Age As a coin ages it is likely the numismatic will increase over time. This is due to the reasons identified under rarity; more and more coins over time become worn, lost, damaged or destroyed.
• Certification Certified coins will generally be worth slightly more than non-certified coins of the same condition. I mentioned earlier that grading is highly subjective even among experts. It is evident in online auctions that not all grading organizations are the same. I have seen auction results for the same type, year, mint and grade with realized price differences of hundreds of dollars because of who graded them.
• Face value or Metal Content These two factors (whichever is higher) set the minimum value of a coin. Inflation discussion aside, a dollar coin will never be worth less than a dollar. A silver dollar will not be less than the market rate for its silver content.

Next there is appraised value. Appraised value is generally used for insuring a collection or for assessing as part of an estate. An appraisal will determine cost or replacement. Appraised value will be based on highest market value. Since collectors build collections over many years of bargain hunting, replacing a collection requires more money per coin to be spent than was spent on the original collection.

Finally there is sentimental value. Coins passed down through generations or coins with special meaning to the owner cannot be assigned a true monetary value.

Conclusion:
If you are asking the question "what is my coin worth" you must ask yourself "why do I need to know". If the answer to the second question is you are looking to sell the coin(s), Then I would make the following suggestion, Do your homework.

• Take the coin to a reputable coin dealer. Ask to have it appraised for insurance purposes.
• Once you have an answer for the insurance value ask the dealer what they would buy it from you for. Depending on the coin you can expect the dealer to chop off about 1/3 of the insurance value
• Check out online auctions. See what coins with the same year, mint and that are in a similar condition are selling for. Trading Cents has a tool to show the past 90 days of auctions to its members.