Auction hammer prices vs. TCR values – Keith Gabor auctions

Have you ever mused about the relation between chip auction hammer prices (final bids) and the TCR low book values of the same group of chips? As a quick & dirty series of calculations, I used Keith Gabor’s weekly listing of 35-40 lots that are almost all Nevada chips. And Keith conveniently includes the TCR value code and book value range in the title, making it easy to collect the data and let Excel work its magic. (BTW, Keith gave his OK to use his auctions in this.)

I used the 120 most recent closed/sold Nevada lots (out of 400+ total lots) from Keith’s auctions. It’s not a truly random sample, as it is limited to a subset of Nevada chips that Keith put up in his dispersal sale. There’s a variety of older and newer chips, but none of the truly extra-valuable/rare “Z-level” chips.
With those caveats, here goes (warning: pretty long-winded )

120 closing values (grand total) = $3358. Average hammer price (/120) = $27.99. Or, if you want to figure as “acquisition cost”, add 10% for sales tax and some shipping = about $31 on average.

120 TCR Low Book Values (LBV) for the same group of chips above = $7680 grand total, or TCR-LBV of $64.03 average.

Ratio of hammer price vs. TCR LBV = $28 / $64 = 44% of LBV (or 48%, if calculating acquisition cost).

Hammer prices ranged from 99cents (starting $ amount on all lots) up to $100+ (7 times, topping out at $255).

A further calculation on Hammer Price vs. TCR-LBV ratios. If you calculate each of the ratios for all 120 lots, individually, it turns out that, on the low end, the ratio was as low as 10% a few times and was at or above the TCR-LBV 14 times. That is, the ratio was 100% to a high of 142% on 14 occasions, which is 12% of the time. That’s a pretty wide spread, so you can't just expect any given Nevada chip to sell at auction around half of its Low Book Value. It just depends on the characteristics and demand for each chip. How come?

My speculation: There’s always supply vs. demand considerations; also, how rare the chip is (or perceived to be); buyer motivation ("nice to have if the price is right" vs. “must have; a key to my collection”). And a big factor that’s often overlooked is having a motivated underbidder(s) that drives the winning hammer price higher that it would be otherwise. I didn’t research it, but I’ll bet a lot of those 100%+ ratio auction results had 2 or more motivated buyers pushing up the final value.

So, that’s my quick statistical analysis of some of Keith’s eBay auctions.

(While I did some additional calculations -- medians, quartiles, deciles, 90%-to-10% range ratios (cutting off the highest 10% and lowest 10% of the sample, where anomalies may exist) -- I’ll spare you those details! )