The shared illusion of value

Value, like beauty, is in the eye of the beholder. You've heard the old saying, "One man's trash is another man's treasure?" Well, that works the other way around, too.


I'm reminded of this as we go through and catalog what we need to replace. When Freecycle fails to provide, my next bet is Craigslist. But, at least out here, prices are hilarious -- inasmuch as 'If you don't laugh, you'll cry.'


Seattle wasn't great when it came to furniture prices, but at least the selection was good for my price range. Here, anything under $30 is pretty much driven by I'm-moving-and-this-needs-to-go desperation.


This disparity could also be because we're close to Scottsdale -- a rather well-to-do area. Still, I have looked at listings throughout the greater Phoenix area, and they're pretty astounding. I've seen several "great" deals on entertainment centers for $300-700.


Want a dining table? There are plenty of people selling them for over $1,000. There were 14 ads posted today for dining tables with a minimum price of $1,000. That doesn't include people who only put the price in the text of the ad.


My favorites? Last night, it was a dining table, two leaf inserts, 10 chairs for $1,500. (Owner paid $3,500.) But today that was trumped by someone selling a custom-made dining set that cost over $11,000.


But this post is more than just angry, cynical ranting about how people tend to have more money than sense. I wanted to talk about that ever-so-fun theory called "value."


In this society, we tend to treat it as a constant. You hear it in our lexicon, as we talk about "investing" in big ticket items. "Oh, well we spend so much time in the living room, with the kids, we invested in a nice couch." Uh, wrong.


Investments have the potential to go up in value. It's why a car isn't an investment: As soon as you take it off the lot, the value depreciates significantly. Similarly, almost everything you buy will lose value in terms of resale. (Unless, of course, you keep it in pristine condition and wait for it to be an antique.)


Still people treat their things as having a set value. Yes, there can be a set value -- the amount which both buyer and seller agree to. But there is no absolute value. You cannot buy a coffee table for $100 and know, for certain, that in 4 years' time it will be worth $50. Or perhaps it's better said this way: An item is only ever worth what someone else is willing to pay.


I ran into this problem when we were preparing for the move. There were things I wanted to be rid of -- but not for the prices that people would be willing to pay. Since I paid good money, someone else should respect that fact by forking over an amount based on the original price.


But the thing is, people who buy used generally do so because they can't or won't pay retail. So why on earth would they agree to a price that's dependent on an amount they've already dismissed? They won't, by and large.


So I learned to let go. I learned to think in terms of money in my hand, rather than compare it to the price I paid so long before. If I kept it, the item earned me nothing. If I sold it, I had some money back. That's the logical, rational way to think about such things.


Intellectually, we all know that, in the same abstract way we know we should floss daily, eat healthy food and never break the speed limit. In theory, we know that taste varies and that the used goods market is fickle, at best. But all that goes out the window once we start dealing in things we have paid for. And the more we paid, the more attached we tend to feel to objects. Whether it's guilt over the expenditure, a determination to "get our money's worth" from the item, or simply a happy memory around the time of the purchase, we are tied to our possessions.


That emotional tie makes it hard to be logical because we're not looking just at facts. We're looking at our own history, our own past judgment calls. While, from an outsider's perspective, it's all a basic instance of sunk costs, to us it's personal.


And so we find ourselves in danger of pricing things too far above market value. We can rationalize it, but in the end we want people to pay for our attachment to these items. And since market value is such a changeable idea, the thing might sell right away. Who's to know?


What we do know is that there are more factors than what you originally paid. Yes, the retail cost does factor in; but you also have to think about how many other people were willing to pay that price, the useful lifespan of the item and, of course, the condition it's in.


In other words, we're all very sorry that you were crazy enough to pay that much money. But we don't want to pay for your mistake. And that's what you're asking us to do: You want us to pay an absurd price simply because you paid a more absurd price awhile ago.


As I sputter, laugh and rant my way through these ads, it occurs to me that perhaps it's not just about recouping some of our money. Perhaps there's also an emotional need contained within these prices. Maybe it's not just helping to cover the cost of a new couch. Instead, maybe it's about justifying what you spent on the old couch.


If you can simply get someone to pay a decent chunk of what you did, it is like the buyer is validating your choice. If they're willing to pay, say, 50% of the thousands of dollars you spent on a living room set, this reassures you that you're not overspending.


In fact, it simply means that it's a shared madness, this idea of inherent value. Yes, things from the Pottery Barn are very nice, but I don't want to pay those prices. And if you've had the item for even one month, no one wants to pay anything approaching what you did. Finally, misers like myself will be appalled at the prices you're asking 5 years later.


It's important to point out that none of this means the people are wrong. Eventually, they will probably find someone who thinks of items' value in the same way. They will agree to something close(ish) to the asking price. That said, I could probably, if I advertised enough, find two people who agree that the grass is blue and the sky is green. That doesn't make it an absolute truth. It just means that their views of the world coincide... far away from mine.