If one were to draw a schematic depicting the relationship between Price and Rarity it would probably look similar to this picture. We would have denominations plotted against rarity and then for each combination of rarity and denomination we would have a price seen on the vertical axis.

Rarity itself  is defined as follows by numbers of existing coins for a given grade -

Before one is carried away with the thought you may have something very rare it is important to ask yourself - If others say something is R4 or R5 what are the chances of that being true ? So let’s think about that. An R4 rarity is 8 to 16 known examples in VF condition. What does that translate to in terms of percentage of what was originally minted ? A look at that the table opposite throws some light on this point.

Here the best estimate of number of coins in existence for each denomination is shown. Percentages for each rarity / denomination are shown below. Personally I feel confident down to a level of around 1% for an R4 crown. This is at the edge of the green area. Past that point in the yellow area it is more a guess unless at sometime someone has done a physical count of what’s out there, discounting contemporary fakes. Other denominations have a different threshold for that 1% level, so it’s well worth keeping this in mind.                  

So much for rarity, what about prices. To date I have not seen an explanation as to how prices are derived in numismatics. There are many rumours. Often I see coins with a designated rarity being equally rare, same denomination, same condition but with different prices which makes no sense to my way of thinking. There is the old often tendered explanation that one date is more popular or not often seen to justify the price difference. One also sees lists where prices stay static for years then for no apparent reason jump up or down. So as with rarity another table is required which relates price to rarity. This plot of price level for differing rarity appears to work well so is used.

To avoid unanticipated jumps in price frequent updates using an external index are required.

So to summarise rarity is defined by the letters N, S, R, R2 etc which relate to number of coins of a given grade in existence. A word of caution on the accuracy of high rarities is given. It is for this reason that the more exotic rarities are excluded from my table. The coin of a given rarity can then be priced in relation to other rarity levels using the plot shown opposite. An external index is desirable to reduce the human element of judgement.  

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