Even before I began working as a personal property appraiser, I’d often encounter questions and concerns about the value of objects.

What’s it worth? Should I sell or consign it? If so, where?

All common questions each of us might consider for ourselves or others as we eliminate our possessions.

In researching other perspectives and ideas about value formation, past and present, I came across a really interesting article Understanding Value: Why Some Things Are Worth More Than Others.

It was written by Ajay Singh Rathore (a research scholar), who writes on topics related to economics, technology, philosophy, and the politics of these topics. That’s a pretty broad perspective. I want to use that post to discuss value, from my appraiser’s perspective and expertise. Value propositions vary depending on the intended use of the appraisal. Below are the nine points discussed in the article. The focus of his article is the creation of value.

1. Scarcity vs. Accessibility
2. Utility vs. Perceived Value
3. The Hidden Concept of ‘Perceived Effort’ and Pricing
4. Leverage: The Multiplier of Value
5. Psychological Value: Humans Buy Meaning, Not Just Function
6. Risk and Uncertainty: Why Playing Safe Pays Less
7. Social Tiers and Market Segmentation: Why Every Product Has a Buyer
8. The Future of Value: Why Physical Labor is Losing Importance
9. The Evolution of Value Systems: How Economic Shifts Redefine Worth

The focus of this post is to help you understand the factors that drive value, economically, socially, and emotionally. 

I think that point #1, scarcity vs. accessibility, is pretty easy to understand. It’s basic supply and demand.

Worth considering in todays market is context. We are talking about NEW goods/objects/stuff. Consider how much stuff is out there in the market already and what is still being made. This complicates matters.

Rare but desirable items may command higher values, regardless of quality or provenance (this is always a factor).

In today’s secondary market, objects are being resold through auctions, estate sales, thrift and consignment shops, Etsy, Facebook marketplace, etc. There are many outlets, which speaks to point #7  above, the market is segmented and tiered. You may find something very similar or the same selling for entirely different prices in different locations. Confusing, right? I think this is a good point of reference for point #9, how value and economic shifts are evolving. We are in the midst of a huge transition where technology and a huge flood of goods are and will continue to flood the market over the next thirty or so years. This period of wealth transfer (that began in the last decade) is known as the Silver Tsunami, and it, combined with technology, is the two largest factors I see impacting the evolution and future of value systems.

The reason we have so many markets and tiers is that we have created so much stuff, but I digress…

We can also look at this as an opportunity to do research and find the best fit for resale of our items.

Let’s go back to the points made above and address #2: utility vs. perceived value. Here we really get into the weeds, but it’s actually not that complicated. Let’s consider how luxury goods are positioned not as utility but as highly desirable, playing upon our emotions. It’s not that one handbag or pair of shoes costs more to produce; it’s the desirability and sometimes limited availability (due to market restrictions/often self-made) that drives prices up. Some of the value is entirely manufactured by branding, marketing, advertising, and promotion of these goods, which create an emotional connection #5 and market tiers #7. Goods that are strategically positioned may have both utility and desirability. We often choose items that extend our identity or the story of ourselves we create through the goods we choose.

This directly relates to #3, perceived effort and pricing, because some brands create the illusion of highly skilled work. Unfortunately, skill doesn’t always (or even usually) equal higher pay. This is an unfortunate outcome of the Industrial Revolution. Before this period, the value of items was directly correlated with the skills of the person (s) making them.

When machines began making goods, we also manufactured the illusion of skills and perceived value was born.

Another outcome of the industrial revolution, as it relates to manufacturing and the value of goods, is the impact each has on the marketplace. If you make one coffee mug, no matter how gorgeous it is, how wonderful it feels in your hand, how easy it is to use, it will likely only impact a few people’s lives. On the other hand, a public vehicle like a bus, ambulance, train, or plane will impact thousands of lives and therefore will always be more valuable than a coffee mug. This is what is understood as value multiplier, #4 above. The more people something impacts, the larger the effect on its value.

Risk=reward, #6. The higher the risk of creating goods or services, the greater the reward in the marketplace. Building a massive, towering skyscraper costs more, not just because of the volume or scale of the project, but because of the associated risk. The architects, engineers, and laborers will likely be compensated more than they would be on a smaller, less risky project.

Finally, and sadly, due to technological shifts (a new era of industrial revolution-IR, maybe the AI revolution?), human labor and skills are being replaced. The IR had a lasting impact on the value of goods that we still see today. The machine era detached human skills from the objects we live with and use every day. I am not a Luddite; I believe that technology can revolutionize the quality of life, but it can also do a lot of harm. We are in the midst of another shift, #8-9, where we don’t yet know how tech will further impact the value of goods or the labor to produce them. I am optimistic that there will always be people committed to the creative (and maybe even rebellious?) act of creating things by hand. We have hands for a reason (not just to type or hold our phones).

If you read the article above linked, the author goes on to outline the history of labor-markets & value and makes some predictions about where we are headed. I am not in a position to do that, and it’s not useful here to this discussion about the value of goods we own, today. I still strongly believe there will always be people who value the qualities inherent in and perceived in handmade objects.

How does this help you determine the value of something you own? 

Knowing your ‘why’ will make it easier to come to a conclusion you can live with when letting things go.

Start by detaching from emotional associations with the goods you own. If you can’t do this, you will never arrive at an honest and true market valuation. That’s okay too. If you are that emotionally attached, you may not listen to experts, friends, or family, and you may not be ready to let go. Set it aside and let that sink in for a while, then revisit it depending on your circumstances. Emotions are not a trustworthy factor in determining value and are one of the most volatile aspects of market fluctuation. I am not an economist but I’m quite certain that ‘runs on the market’, enflamed by fear and scarcity mindsets are just one example of the impact on global market valuations.

Keep your emotions out of the value equation and run through the other points above to identify the biggest factors impacting value.

Maybe you have a lot of furniture you inherited, but it’s a reproduction, unmarked, or not luxury, and there are many similar items on the market. That will help you to understand the market range. Maybe you see one example at $50 and another at $500, and you need to sell something similar. You can ask yourself whether it’s an exceptional example worthy of the higher price; if not, you can make adjustments accordingly. Market saturation (#1) is probably the biggest factor to consider when pricing items or seeking valuations.

Not every point above is equally applicable to all goods. If scarcity or risks are not big factors in the goods you need to value, then set them aside and focus on the factors that you know have a big impact. It is always helpful to be armed with as much technical information (who, when, what, how) as possible to begin with. Once you have that in hand, ask yourself why you want or need to know the value. If you are not sure, see this post I wrote about appraisals and markets used to identify values.

In conclusion, I hope you will keep three key things in mind; leave your emotions out of the equation, there is not one value for one object (there is a range, based on what the market can bear), and the market changes and is impacted by many factors (above) and nothing will stay the same value forever.