Market Report - slipping, bit by bit
Day 1,650, 04:02
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Published in USA 
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by
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by Wilhem Klink
Markets either hold or slip. There is no advance.
Raw materials hold despite returning downward pressure. World-wide weapon raw prices have fallen below eUSA's likely meaning a drop by tomorrow. But for now the Raw Material Index holds at 28.89.
The mid-range (Q3 & Q4) improve in food prices, but the low- and high-end lose ground as the Food Index falls 0.44 to 70.93.
Likewise with weapons, two levels rise (Q3 & Q5) and everything else falls as the Weapon Index slips 0.20 to 70.91.
Wages hold as the Wage Index stays at 103.39.
The Gold Index also holds at 123.37.
The Index:
The 1600 AU Index
Based off of the amount of gold a player could earn in a year by working at market wage, selling 20 weapons, 200 food (both Q6) and 1750 raw materials (split 50/50 food/weapons) the 1600 AU Index drops to a record low of 258.73. Nothing worked in the 1600 AU Index's favor today.
Looking at market prices as a multiple of Q1 - The 1600 Index has noted that the market self-corrects: each quality level is roughly its multiplier of Q1. In other words a Q2 is about two times a Q1 price; a Q3 is about triple the Q1 price; a Q4 is quadruple the Q1, etc. The chart form today:
Reading the chart one would note that, based on Q1 weapon price, a Q4 weapon would sell for $15.16 (4 times the Q1 price of 3.79). Since its selling for $15.29, we assume a premium of $0.13, or less than 1%
For weapons, while Q6 remains overvalued, the other quality levels are roughly on with Q2 making for a small bargain.
For food, Q1 isn't as overvalued as it has been in the past as now only Q2 sells at a slight discount of Q1's price.
The prices over time.
Q6 is still selling more like it was a Q7.
And food
One can certainly see the jump in Q1 food prices on 1640 and how long it took to get back to even.
Moving Averages
For those unfamiliar with a "moving average", in the following charts, the blue line represents the market price at 3:00 eRep time. The red line in the 5-day moving average (average of the last 5-days) of market prices. What that tells us is whether prices are trending downward (the market price is below the moving average) or trending higher (the market price is above the moving average).
A look at gold
Gold is trading just above, but close to its 5-day. It doesn't show signs of slowing down.
Raw Materials:
Prices have stabilized enough to bring the 5-day & market price to even.
Food is off its low of a few days back making the market price ahead of the 5-day average.
Note: prices are reflective of a percentage of Day 1600's price (Hence the "1600 Index"). In other words if an index is quoted at 88, that days price is 88% of the price on Day 1600. Except the 1600 AU Index which represents an amount of gold one can buy given market conditions as noted in that section.
Methodology on prices: prices are taken at 3:00 eRep time. The price is the average price of buying 1,000 Raw materials, 500 Food, 100 weapons (at each quality level), and 8 gold, plus the market wage less any fraction of cc (so 240, rather than 240.1). All qualities are standardized to Q1 (per hit or per health).
Sic transit gloria mundi
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Comments
eRep economy...it's getting rather predictable, huh? ; )
I know we can look at the different quality levels of food as multiples of Q1, but I don't think that works for weapons because the increase in weapon quality does not just equal one more hit, it also delivers a multiple of more damage. Because of that, it doesn't make sense to consider one Q6 weapon equivalent to six Q1 weapons since the Q6 will deliver 120x6 firepower and 6 hits and six Q1 weapons will deliver 20x6 firepower and 6 hits.
@Shaun carter - I understand that and I agree with that principle, but that's NOT how the market prices it. Weapons are always priced off hits, not power. Look at the chart, the numbers speak for themselves: Q2 is twice Q1's price, Q3 is 3X Q1's price, etc. Other than Q6, there is no premium paid for the extra firepower and that premium has only been in the last few weeks. I'm just reporting what's there, not what I think it should be.
I'm not disagreeing that the market prices weapons that way, I'm just saying the market is acting irrational since it isn't taking into account the incremental firepower increases with each increase in weapons quality (with the exception of Q6). I was pointing out a flaw in the market, not in your analysis of it.
shaun carter. a big rule in life is that something is only ever worth what another will pay. as it is playersbuy q6 and the bt buys everything else....
*bot
I understand that concept perfectly lol. I'm an economics major, hence my interest in market dynamics within erepublik.