Arbitrary coherence and coral prices

[Derry]

GBD had an interesting article/op-ed/rant regarding the exorbitant pricing of some of the corals out there. It makes for an interesting read.

Arbitrary coherence and coral prices (Glassbox Design)

[GKarshens]

He used a lot of fancy words to say don't pay more for something than you have to. I have always followed this idea when buying corals. The most I have ever spent was on some Acans at the height of their popularity. I paid $160 for 3 heads. I later tried to sell the now 7 head piece for $80 and didn't get a single bite. Fads are a huge part of this hobby too. For a while it was SPS, then Acans, then Zoas, etc. Those Acans were the only time I have jumped on a current fad and that was because they were sick colors. I guess reefing on a budget has it's upside.

[pbnj]

One would think that rarity would be driving the prices of some of these coral frags, but not in this hobby. Every Tom/****/Harry website sells the same "LE" chalices, so are they really that rare?

Seems like the color spectrum tends to drive pricing more than anything else, i.e., the more you move away from the color green, the higher the price of the coral/frag.

[jestep]

It's tough to have a rare coral stay rare when just about every one can be propagated in captivity. Just add in the fact that there's basically no way to differentiate between a nuclear orange sunburst magical explosion, and a plain old orange sunburst explosion. Photoshop doesn't help the matter much either.

The exception in my observation is scoly's, rhyzo's, and few other very expensive corals. These almost always come from the ocean so IMO it's a double whammy as far as collecting from the wild and paying for something that can't multiply in your aquarium.

[Will]

prices in luxury hobbies like ours are very rarely dependent on cost. certain people like to have the very best possible, so dealers create that for them.

If i found a color morph of GSP that was bright red instead, im sure people would pay alot for it.

[caferacermike]

But Will, what defines why one coral is significantly "better" than another? How is it possible that there is a "best" coral? Unlike a piece of machinery that can be compared to another for craftsmanship, usability, reliability, fitment, practicality and so forth, they all just sit in our tanks and look nice. Looking nice does not mean "best".

[Will]

But Will, what defines why one coral is significantly "better" than another? How is it possible that there is a "best" coral? Unlike a piece of machinery that can be compared to another for craftsmanship, usability, reliability, fitment, practicality and so forth, they all just sit in our tanks and look nice. Looking nice does not mean "best".

Mike, i should have been more specific, I am comparing our hobby to hobbies like collecting art, or other items that do not derive their value from their utility. But in general, or at least in practice, what is best is defined by what the majority of people in the hobby state as being best. This usually correlates with what is most expensive/rare.

As it stands the only difference between what makes a coal "best" is how "rare" it is or how much it cost/ resale value(after grow out).

If you tried to financially "value" a coral, you would look at two things. 1st you would look at what future cashflows it might brings and what value you might derive from it upon sale. Purchase price - (proceeds from selling frags + proceeds from selling future colony)/(required rate of return). The second thing you would look at would be the intangible value you gain from it (enjoyment at looking at it, enjoyment at knowing that you have something rare, prestige in acquiring something that most do not have, essentially all of the reasons that someone buys an expensive piece of fine art).

Both the proceeds from selling the frags and the proceeds from selling the future colony are dependent on the market value of the coral, which is simply what people will pay for it. The intangible value is also directly dependent on the price paid for the item, or the rarity of the item (this is especially true for reef junkies, and not so true to beginners). Therefore the only variable that makes a coral valuable or the best, is the price paid for it, and the impact that price has on other peoples ability to buy it. The value of a $2000 coral is the fact that at this price other people will not be able to buy it, therefore making it rare, where in turn holds up the value of the coral at that price. once the coral has been made available to enough other people, the price will drop as supply increases.

so Mike the only thing that makes one coral better than another is how much it is worth, and the only thing that determines its worth is how much people will pay for it, and its scarcity.