Economy guide

The RuneScape economy bears many similarities to economies in the real world. While general and speciality shop prices depend largely on the number of items in stock, player prices are influenced by many factors other than supply and demand. Real world economies behave differently from RuneScape's in some respects, particularly because of the limited time many have to play the game, which makes it very difficult to have real-life like financial organisations as player owned banks, shops, stocks, or insurance companies, for instance. Another important difference between the real world economy and the RuneScape economy is that after buying an item on the Grand Exchange, a player may not sell that same type of item on the Grand Exchange until four hours has elapsed. This prevents near-instantaneous "item flipping" and causes the bid-ask spread of items on the Grand Exchange to often be as high as several percent of the item's value. Another difference is that median prices on the Grand Exchange only update on average once every 24 hours, usually changing the price of an item no more than 5% either way, whereas in unrestricted economies prices may change in real time and there is no limit to how much the price can rise or fall in a given time.

The RuneScape economy also lacks some key economic principles which arguably exist in the real world, including a lack of risk free investments, an absence of government-enforcement for financial contracts, and a clear violation of the efficient market hypothesis, among others. In particular, violation of the efficient market hypothesis means that smart merchants can predict the direction of prices accurately and make high profits, which is often untrue in the real world. These differences make the runescape economy simpler but much less diverse.

There are several currencies in RuneScape; most currencies, however, are used in trading between non-player characters and players in certain areas. Therefore, coins will be treated as the exclusive currency for player-to-player trading in this guide.

In general, there are several categories of items that players may obtain. Quest items and other untradeable items are not covered here, as they have little to no impact on the player economy. Four main item categories, commodities, consumables, finished items, and discontinued items, will be discussed in detail in this guide.

This guide is for informational purposes only, and may not reflect recent changes in the economy.

Stability of the Runescape Economy in terms of inflation/deflation
The RuneScape economy has had periods of inflation and periods of deflation. Most recently, the economy was in a state of deflation for at least a year and a half before June 2009. It has been in a state of inflation since, due to the update where PvP drops such as the Dragonfire shield, Dragon full helm and Amulet of fury to be replaced with 'God' items. These 'God' items have no street value, as they can only be traded in for large amounts of coins. High Alching and this conversion of PvP drops are the two major sources of coins to be added to the economy. Mass inflation has ensued, due to the large amount of coins that PvPers have added into the economy thus decreasing the respective value coins compared to the value of items.

To exemplify this consider the abyssal whip: before the inflation, Abyssal whips were somewhat stable at a price of 1.5m gp, but now are worth about 3m. This does not mean that Abyssal whips are more valuable or rare than they were previously, it simply means that there are more coins or players in the RuneScape economy. This in turn causes the whip to be in higher demand or inflated. A similar trend can be observed in many other expensive items and item sets, such as the Amulet of fury, the Berserker ring and the Bandos and Armadyl armour sets.

Gold sinks are features that drain coins or items out of the game. The primary gold sinks are buying items from shops, losses on banned accounts, coins or items lost when they are not picked up, the cost of repairs to Barrows armour and recharging of Crystal bows and the use of the sawmill to create planks. Consumables such as food, potions, arrows and runes also drain value from the game. Value is created when people produce consumables, commodities and finished items through monster drops or through the use of skills. The consumption of consumables and loss of other items through player death helps balance the runescape economy, however the level of balance is an issue with much debate.

The Construction and Summoning skills are the largest gold sinks, as they require players to spend a hefty amount of coins (many of which are directly lost from the game from paying the sawmill fees, or buying spirit shards, respectively).

The economy is split-level, where the price shifts of high level items has little effect on the basic items. It is common for the prices of items to be linked together, as they serve similar purposes. For example, if there were a massive decline in the price of godswords, other high level weaponry, possibly also other equipment such as abyssal whips, dragon boots, bandos items, and berserker rings might also devalue. As in real-life economies, supply and demand does not dictate that these changes are reasonable in terms of actual changes in the supply and demand, but may have psychological causes. Based on Cross-Elasticity of Demand, completely unrelated items such as coal and flax, black dragonhide armour would not be affected by a crash of items fulfilling other needs in the game.

Hard prices
Certain items are commonly bought from stores or sold to stores. For these items, the store price serves as a stabilising factor; the price is not based entirely off of player supply and demand, but there is a price floor or ceiling caused by the stores. This price floor or ceiling are limits in the prices players may exchange their items on the grand exchange. For items commonly bought from stores, the price cannot rise much beyond what it costs to buy from the store. An example of such an item is Marble blocks, which can only be obtained from buying from a store for 325,000 coins each. For items commonly sold to stores, the price cannot fall much beyond what is made from selling to the store. An example of such an item is Willow logs, which may be sold to a general store for 8 coins each.

Store prices shift by a certain amount depending on stock levels, and where large amounts of player-made items are sold to the store (dumped), the prices can be seriously depressed. Some people speculate in this type of situation as they do not believe the situation will be maintained. Common items dumped in stores in large amounts are usually already stuck at their price floors.

"Hard prices" are the prices of items commonly acquired through shops that do not usually change unless the store prices are directly changed by Jagex. One case of "hard price" inflation in RuneScape, was when Jagex raised the store price of Chaos and Death runes to be close to the typical player trading price, as the low prices aided autobuying bots who camped in the stores and bought all the stock as it respawned. One case of "hard price" deflation was when the Karamja gloves came out and an onyx gem could be obtained for 260,000 tokkul instead of 300,000.

Soft prices
"Soft prices" are the prices of items that are largely controlled by player supply and demand. This is often the situation where the item cannot routinely be obtained from a store, as you have to rely on finding a player trading the item you want at a price you are prepared to pay.

Merchants
Merchants usually buy items from players and sell the items to other players to attempt to make a profit.

It also is sometimes considered merchanting to buy items from shops and sell to other players for higher.

There used to be a type of merchant who would buy items in small quantities from many players for low prices, and sell in bulk for higher prices. However, this is no longer possible because of the Grand Exchange.

Grand Exchange
There are three types of merchants who use the Grand Exchange: flippers, investors, and manipulators. Individuals may engage in more than one of these, however. See the Merchanting article for more information.

In terms of effects on the economy, flippers do not have much effect. They buy items when there is an excess of supply in the Grand Exchange and then sell them when there is an excess in demand, within the same day or grand exchange update. Investors have a little effect, holding onto an item for several days in the expectations that it will rise in price, and manipulators have the most. Manipulators will buy out all of an item on the Grand Exchange to make the price increase, then attempt to sell at a profit or as junk later.

Store Arbitrage
Players may buy items from stores at stock prices, and sell them to other players for a high price, often deliberately creating a shortage of slow restocking items. However after recent changes made by Jagex, this no longer has effect as shop stock would be based only individually,i.e. Aubury's Rune shop in Varrock, thus changing the classification of goods from pure public goods to pure private goods, with inclusion of excludable Free goods like 30 Mind runes and 30 Air runes.

Players may also buy up overstocked, price-depressed items cheaply, and then sell them at another store, on another world, or at a later time where there is no stock. However, the level of overstocking needs to be quite severe, to ensure that the selling price bottoms-out at a level below the normal buying price of the store.

Players may also modify some items, such as stringing amulets, so that they are a different item, and immediately sell a few back to the same store.

Types of item
It is reasonable to divide items into a few distinct classes.

Commodities
Commodities, also referred to as raw materials, have uses in processing/manufacturing skills such as Cooking and Fletching. They cannot be used or consumed in any way. Most of the time, commodities are used to produce consumables, finished products, or other commodities. In bulk, commodities are often quite easy to sell, as they are demanded by players looking to gain levels in processing skills. This is not the case for items that are not considered fast experience, however. Higher prices are offered for larger quantities in general, and store prices have little effect on player valuation. Other factors, such as bannings of macros, tend to play a larger role.

With the release of Capes of Achievement, demand has increased for commodities, especially commodities used in Cooking and Fletching, as they are regarded by many players as the easiest skills to train.

Examples

 * Raw fish
 * Rune and pure essence
 * With the release of pure essence, normal essence is less useful to members (who made up the bulk of the demand) and has dropped in price sharply. Pure essence can be obtained if you are a member and have at least level 30 mining.
 * Commonly traded at the Varrock east bank.
 * The best example of supply and demand,with the advent of pure essence, normal essence prices dropped to about 10-20 coins for a while but then increased to 20-35 coins each, and pure essence prices became 80-120 coins each, all these prices can vary depending on the amount that is being bought/sold and whoever is buying/selling. After the introduction of the Grand Exchange prices have soared to around 40 coins for rune essence and 170 for pure essence. This is mainly because players are getting wealthier and that bulk trade is a lot easier. However, since almost all suppliers of Essence were/are non-members, there was little supply of Pure Essence. The Grand Exchange realises this and so puts up the price of Pure Essence causing it to be exorbitantly high for Runecrafters trying to buy it to process into high level runes.
 * Coal
 * Coal wasn't that stable in the past with merchanting at Falador bank, but it has recently been stable at 195-200 because of autoers being decreased.
 * Bars
 * The market price for steel bars makes it impossible for buyers to profit unless smithing cannonballs, but the price of most bars is held up by the fact that they provide concentrated Smithing experience.
 * Logs (other than normal logs), usually used for Fletching, Firemaking, or Construction
 * Willow Log prices have declined in Rimmington due to at least 5 Willow trees being just metres south. Willow logs at the local general store, sell for a minimum of 8gp and a maximum of 16gp.
 * Feathers

Consumables
The difference between consumables and commodities, is that they are used up without necessarily creating any result. The trade in consumables is usually a lot slower than in commodities, since you usually only collect enough for a couple of trips.

Examples

 * Food (e.g., cooked fish)
 * Runes
 * Runes that are the most useful, such as Water runes and Death runes for Ancient Magicks and Nature runes for High Level Alchemy, are highest in demand.
 * Law runes when bought singularly demand prices of over 1000 coins, due to the inconvenience of selling only one causes the seller. However, when bought in bulk they are closer to 350 coins due to their use in training magic. Also, now that law Talismans are now tradeable, the prices are going down, making Law runes cost a similar amount to Nature runes.
 * Since the "Legacy of Seergaze" quest was released, along with the ability to craft Blood runes, the price of Blood runes has dropped rapidly. They used to cost 500-600 coins each, and now have gone down to 260-300 coins each. The price is only just starting to rise again.
 * Arrows
 * Potions

Finished Items
Since there is no requirement for other finished items in bulk quantities, these are normally traded to the stores, or "alched" if the price is worth it. A problem for higher level smiths is that although there may be players who would pay more for Mithril items or above, meeting them takes a long time. Trade in finished items is very slow. Smithing "on-demand" is one way to beat low store prices, without carrying a bank-busting stock of assorted items. In a departure from real-world economies, finished goods usually fetch lower prices in the Grand Exchange than the components used to make them. This is because there is greater demand for the incomplete article for the experience point value than there is for the finished piece.


 * Clay items
 * These are often found as "waste" around the Pottery oven in the Barbarian Village, with a trail of bowls leading from the pottery back to the mine
 * Leather items
 * In the past, excess leather items (mainly hardleather bodies) are often sold to Al Kharid shop for 50 gp each, since the Lumbridge and Draynor Diary was released, players tend to low alch the leather items as the value is actually higher than selling to shops, and Magic experience is given. Nevertheless, the market of leather items is still over-saturated and they are suffering permanent drop in Grand Exchange price, down to the low alch price.
 * Armour & Weapons
 * Iron and steel armour and weapons are common among products of smithing trainings. They are sold to armour, weapon and general stores in large amount every day. It is assumed few would alch them as it is undesirable to do so, unless the player is far from the Grand Exchange they might use low alchemy function from Explorer's Ring.
 * Jewellery
 * Jewellery is often sold to the Jewellery stores, due to the high value it gives. Players would usually sell large number of amulets or necklaces at once, but some players are smart enough to sell them slowly, contributing a little to the inflation of items.

Discontinued and rare items
The discontinued items represent an item class of their own. The discontinued items are mostly items that were given years ago in holiday drops, and the decreasing supply coupled with sometimes increasing demand sometimes drives prices up. The drops were intended to just be a fun treat for people who happened to play on the given holiday. However, Jagex found that these items were being hoarded and sold later for much higher prices, due to these items being impossible to obtain after the holiday, and therefore rare. In response, Jagex at first stopped all holiday items, but later created a new series of untradeable holiday items, the oldest of which was released about six years ago.

Prices of discontinued items are quite volatile and sometimes the market overreacts to certain news. They are sometimes considered a relatively safe long-term investment for those who can afford because of them being discontinued.

However, players often overestimate how fast the supply is shrinking and how fast the demand is growing and discontinued items are indeed capable of undergoing major crashes. The November and December 2007 updates to remove real-world trading, including the removal of traditional staking at the traditional wilderness, caused the prices of discontinued items to crash. In particular, partyhats were unsellable on the Grand Exchange at minimum (without a huge stroke of luck) until some instances in late 2008, and they did not experience a long episode of inflation until the summer of 2009. As of September 2009, the low level partyhats have only recently reached their peak prices from the fall of 2007 before the anti-real-world trading updates. "Small rares" followed similar trends.


 * Party hats (all colours)
 * Christmas cracker
 * Halloween mask
 * Santa hat
 * Pumpkin
 * Easter egg
 * Disk of returning (not a holiday drop)
 * There once was a "black hole" that banned players were sent to. Other players could go into this hole also, and they could leave by using this. The "hole" no longer exists.
 * Half Wine (not holiday drop)
 * These became discontinued when Jagex changed wine jugs so they were consumed in one click, not two. The people with half wines already on their accounts were the only source of the rare item. There street price is currently around 55,000,000

Availability
The level of availability of an item also has an effect on the price, or specifically, the price another player will offer.

The release of the Grand Exchange caused a lot more availability to players. For example, before the Grand Exchange, if you wanted to buy enormous quantities of coal, you used to have to either login to a busy world and constantly offer to buy coal with no guarantee of finding players wishing to sell it at that time/location, or search for threads on the forums selling bulk coal, also with no guarantee. With the Grand Exchange it's possible to buy large quantities of coal within seconds. In one offer you can easily receive small amounts of coal from hundreds of players.

Common
Some items are quite commonly available, but not necessarily at the location they are wanted.

Only in Al-Kharid, is the craft shop where you would buy moulds close to the furnace where you would use them.

No store (free world)
Shields above Mithril square, Rune two-handed swords and a few other desirable items in the free-to-play world have no regular store, so are unavailable except by player trading or reaching the level required to make them.

Rare and semi-rare
The genuinely rare items are from the early days of RuneScape, and may be found among the Rares and Holiday Drops. It is worth repeating that trimmed or God armour is only obtainable from members treasure trails, and no player can trim existing armour. Also, please note that claiming an item to be rare when it is not listed in the officially recognised list provided by Jagex is against the rules. Rare here is only used to mean uncommon but is considered to be an item type (rares) in RuneScape.

There are some pseudo-rare items in free-to-play, that are actually available to members and may be traded and used by free players. Some useful items in this category are certain items in Black, that are unavailable by any means in free-to-play:


 * Black hatchet
 * Black scimitar (However members can find a Black scimitar drop in the first floor of Ardougne Castle.)
 * Black warhammer
 * Black two-handed sword

All other black items can be bought from stores, or can be obtained from a monster drop in free-to-play. Since black items cannot be player-made, it is not possible to smith them. Unless you insist on wielding one of these weapons instead of a black longsword, then there is no need to be held to ransom for a particular item.


 * Black full helmet: only available in the Champions guild
 * Black scimitar: respawns on the 2nd floor of Ardougne castle.

The remaining Black armour and swords are sold in the usual stores.

There are also coloured gloves, that are cheap for members and can be traded to and worn by free players - they do not offer any advantage over plain leather.

Controversy about Grand Exchange
It is sometimes claimed that Jagex controls the prices of items via the Grand Exchange. This is partially true in some aspects in some cases, but in general the economy is controlled extensively by the players themselves. Jagex never places offers in the Grand Exchange; all offers are from players (or from Coinshare, but Coinshare items were obtained by players anyway). Most items have a 10% price range in which a bid-ask range can form with the bid above the minimum and ask below the maximum, and the prices can update daily to reflect changes in supply and demand.

The Grand Exchange has altered the economy of Runescape in many ways; some have been seen as positive, some as negative. It is sometimes claimed that the Grand Exchange ruined the economy and caused massive deflation. Some players believe its prices are often too easily manipulated, but it has also been praised for helping players get items that may have previously been harder to obtain. It is also sometimes claimed that the Grand Exchange ruined merchanting, but claims have also been made that it has made merchanting easier, due to increased availability of some items.

One case in which Jagex does directly control aspects of the economy is through store or alchemy prices.