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. However, real world economies behave differently from RuneScape's in some respects, particularly because of the limited time many have to play the game, which renders the availability of financial organisations such as player owned banks, shops, stocks, or insurance companies difficult. 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 between the two economies is that median prices on the Grand Exchange only updates, on average, once every 24 hours, usually resulting in a change in the price of an item of no more than 5% either way, whereas in unrestricted economies market 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 clearly violates the efficient market hypothesis, among other concepts. In particular, violation of the efficient market hypothesis means that capable merchants are able to 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: primary products, 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.

Introductory Concepts: Supply and Demand
Supply and demand are the market forces that determine the price of an item, unless it is affected by price control mechanisms. Supply is, essentially, the availability of an item on the market while demand is how much a player wants (and can pay for) an item. A supply and demand graph can be created to view a general price of an item. The curves on the below graphs show the quantity of a good supplied or demanded at a given market price (if there is more profit to be made, more will be supplied, whereas if a good becomes cheaper, more will be demanded). If there is no intervention on the market, it will naturally "balance out" at the equilibrium point. Supply                             Demand |        S      |                  |                | 5 |       /       |                5 |     \          |    Price      4 |       /        |     Price      4 |      \         | ($/Shrimp)  3 |      /         |   ($/Shrimp)   3 |       \        | 2 |    /          |                2 |        \       |               1 |    /           |                1 |         \      |                 |________________|                  |__________D_____| 2 4 6 8                          2 4 6 8                  Quantity (1000s of Shrimp/Day) *Same for both graphs The Equilibrium Point (where price = quantity) |        S      | 5 |   \   /       |    Price      4 |     \ /        | ($/Shrimp)  3 |- - - X         | 2 |    /|\        |               1 |    / | \       |                 |______|_D_______| 2 4 6 8                Quantity (1000s of Shrimp/Day) Increase in Supply                 Increase in Demand (Double Fishing XP week)         (Shrimp heal more per bite) |        S0  S1 |                  |                | 5 |       /   /   |                5 |     \   \      |    Price      4 |       /   /    |     Price      4 |      \   \     | ($/Shrimp)  3 |      /-->/     |   ($/Shrimp)   3 |       \-->\    | 2 |    /   /      |                2 |        \   \   |               1 |    /   /       |                1 |         \   \  |                 |________________|                  |__________D0__D1| 2 4 6 8                          2 4 6 8                  Quantity (1000s of Shrimp/Day) *Same for both graphs Increase in Supply                 Increase in Demand (Double Fishing XP week)         (Shrimp heal more per bite) |        S0  S1 |                  |           S   | 5 |   \   /   /   |              ^ 5 |- - -\- -X     | Price     4 |     \ /   /    |     Price    | 4 |      \ /|\    | ($/Shrimp) | 3 |- - - X-->/    |   ($/Shrimp) | 3 |       X-->\   | | 2 |    /|\ /      |                2 |      / \|  \  |             V 1 |- - /-+-X       |                1 |     /   \   \ | |______|_|_D_____|                 |_________|D0__D1 2 4 6 8                          2 4 6 8                  Quantity (1000s of Shrimp/Day) *Same for both graphs A decrease in demand has the same effect on price as an increase in supply (price falls), except the demand curve will move left. An example of a decrease in demand would be shrimp making stats decrease, reducing the willingness of players to buy shrimp. A decrease in supply has the same effect on price as an increase in demand (price increases), except the supply curve will move left. An example of a decrease in supply would be anchovies being updated so that they heal even more per bite than shrimp. More fishers are catching anchovies instead of shrimp now, so there are fewer shrimp available on the market. Discontinued Items |     S         | 5 |   \ |         |         Price      4 |     \|         | (100M$/PHat) 3 |- - - X         | 2 |     |\        |               1 |      | \       |                 |______|__D______| 2 4 6 8                Quantity (100s of PHat/Day) In this case, since there are no party hats entering, the demand of the item is the factor which drives the price (although supply will steadily decrease due to party hats lost through characters quitting, deaths, etc., also gradually increasing price over time). As no new party hats can enter the market, the supply is perfectly unresponsive to prce changes and the quantity of party hats on the market cannot increase. Thus, the movement of the supply curve can largely be ignored.

Merchants
Merchants buy items from players to attempt to make a profit by selling the items to other players at a higher price.

Buying items from shops and selling them to players for a higher price than was paid is also sometimes considered merchanting.

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 since the addition of player trade limits and 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 types, 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 high supply on the Grand Exchange and then sell them when there is high demand, within the same day or Grand Exchange update period. Investors have a larger effect, holding onto an item for several days with the expectation that it will rise in price, and manipulators have the largest effect on the market. Manipulators will buy out nearly the entire stock of an item on the Grand Exchange to make the price increase (in effect, they cause a large reduction in supply), then attempt to sell at a profit or as junk ("dump" the item) later.

Store Arbitrage
In the past, players could buy items from stores at stock prices and sell them to other players for a higher price, often intentionally creating a shortage of slow-restocking items. However, after recent changes made by Jagex, this no longer has any effect as shop stock is now personalized.

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 the items are no longer in stock. However, the level of overstocking needs to be quite severe to ensure that the selling price bottoms out at a level sufficiently below the normal buying price of the store that such activity is profitable.

Players may also conduct store arbitrage by modifying some items; for example, by stringing amulets, so that they become classified as an altogether different item, and immediately sell a few back to the same store.

Stability of the Runescape Economy in terms of inflation/deflation
The RuneScape economy has had both periods of inflation and periods of deflation. In the past, 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 an update in which PvP drops such as the Dragonfire shield, Dragon full helm and Amulet of fury were replaced with 'God' items, which have no street value as they can only be traded in for large amounts of coins. High Alching and the aforementioned conversion of PvP drops into coins are now the two major sources of coins being 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 of coins compared to the value of the items that they are used to buy.

To exemplify this, consider the abyssal whip: before the onset of inflation, Abyssal whips were somewhat stable at a price of 1.5 million coins, but now are worth about 4 million coins. This does not mean that Abyssal whips are more valuable or rare than they were previously (quite the opposite in fact, with more whips entering the economy through monster drops and whips gradually being supplanted by weapons with higher stat bonuses)- it simply means that there are more coins or players in the RuneScape economy. This, in turn, causes inflation due to an increase in the supply of coins on the market, which decreases their value relative to the items that they are used to buy and, in addition, the increase in the number of players causes the demand (willingness and ability to buy, at any price) for whips to increase, further raising their price and (possibly) leading to demand-pull inflation if the total demand for all goods in the RuneScape economy increases. A similar trend can be observed with many other expensive items and item sets, such as the Berserker ring and the Bandos and Armadyl armour sets, as well as primary products such as iron bars.

Gold sinks are features that remove coins or items from the in-game economy. The primary gold sinks are buying items (including skill-related items, such as magic stones or spirit shards from shops), losses on banned accounts, coins or items lost when they are dropped and not picked up, constructing a Player Owned House, the cost of repairs to Barrows armour and the recharging of Crystal bows and Chaotic equipment and the use of the sawmill to create planks. The use of consumables such as food, potions, arrows and runes also drains value from the game. Value is added (in most cases) when players produce consumables, primary products 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 thus produced is a contentious issue as, for example, the use of consumables can be seen as an investment if the loot gained from monsters killed while a player was using consumables surpassed the value of said consumables.

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 removed from the game through sawmill fees, or buying spirit shards, respectively).

The economy is split-level, where the price shifts of high level items have little effect on the prices of basic items. Nonetheless, it is common for the prices of items to be linked together (they are in joint demand, meaning that a change in the price of one item will lead to a change, in the same direction, in the price of the other item), 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 decrease in value (however, the reverse may occur if the items in question serve similar purposes at a similar level- it is then highly likely that they will be in competitive demand). Items that are completely unrelated (coal and black dragonhide, for example) will likely not be affected by changes in the price of the otrher item. As in real-life economies, however, "irrational" player psychology may also influence the demand for, and thus the price of, items.

Price Controls
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 entirely based on player supply and demand; rather, the stores introduce a price floor (minimum price) or ceiling (maximum price) to the markets for those items. For items commonly bought from stores, the Grand Exchange price cannot rise much beyond what it costs to buy it from the store (ignoring the possible factor of convenience, if the store is far from hubs of player activity, as is the case with halberds), as buying from the store is often the cheapest alternative for players in such a situation. These price controls are also present as limits in the prices that players may exchange their items for on the Grand Exchange. An example of such an item is a Marble block, which can only be obtained from the Stonemason in Keldagrim for 325,000 coins each. For items commonly sold to stores, the Grand Exchange price cannot fall much beyond the store price (again, due to greater profits being obtained by selling the item to a store, rather than on the free market). An example of such an item is Willow logs, which may be sold to a general store for 8 coins each. This encourages inefficiency as the distorted Grand Exchange prices foster shortages (where there is limited supply relative to demand, and buyers must often wait for long periods of time before the purchase is completed- e.g. a Left Eyepatch) or surpluses, where shop prices are low relative to exchange prices and sellers must often wait long periods of time to sell their products due to low demand at free market prices.

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, possibly leading to speculation and arbitrage. 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 case when the item cannot routinely be obtained from a store, as players must rely on finding a player trading the item that they want at a price that they are prepared to pay. Nowadays, after the unbalanced trade updates, most "soft price" item trading (with certain limittions) occurs on the Grand Exchange.

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

Primary products
Primary goods, 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 other way. Most of the time, primary products are used to produce consumables, finished products, or other primary products. In bulk, primary products are often quite easy to sell as they are demanded by players looking to gain levels in processing skills. This is, however, not the case for items that are not considered to grant fast rates of experience when processed. In general, higher prices are offered for larger quantities, and the store prices of primary products have little effect on player valuation through market forces. Other factors, such as bannings of macros, tend to play a larger role in affecting price, as they directly affect the market forces (for example, banning macros would decrease supply).

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

Examples

 * Feathers
 * Raw fish
 * Rune and pure essence
 * With the release of pure essence, normal rune essence is less useful to members (who contributed to the bulk of the demand) and has dropped in price sharply. Members with at least level 30 mining can mine pure essence; however, anyone can buy, sell, or own pure essence regardless of mining level.
 * This is a good example of supply and demand at work, as, with the advent of pure essence, normal essence prices dropped to about 10-20 coins for a while and subsequently increased to 20-35 coins each, while pure essence prices rose to 80-120 coins each. All of these prices can, however, vary depending on the amount that is being bought and sold and whoever is buying or selling. After the introduction of the Grand Exchange, prices soared, mainly because players had, in general, more coins, and because bulk trade became a lot easier using the Exchange. However, since almost all suppliers of rune essence were non-members, there was little pure essence supplied. Due to market forces, the price of pure essence increased, making it considerably more expensive for Runecrafters trying to buy it and process it into high-level runes. Currently prices are coins for rune essence and  coins for pure essence.
 * Coal
 * Coal was not very stable in price in the past due to merchanting at Falador bank, but has since stabilized at 195-200 coins due to a reduction in the number of coal-mining autoers. Coal is currently selling for coins on the Grand Exchange.
 * Bars
 * The market price for steel bars makes it impossible for buyers to make a profit through Smithing unless smithing cannonballs, but the price of most bars is maintained by the fact that they provide concentrated Smithing experience (thus, demand for them is high).
 * 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 of the general store. Willow logs at the local general store sell for a minimum of 8 coins and a maximum of 16 coins; their usual price, however, is 8 coins due to high store stock.

Consumables
The difference between consumables and primary products is that consumables are used up without necessarily being used to create any other items. The trade in consumables is usually a lot slower than in commodities, since the quantity demanded per transaction is often lower, as players usually only collect enough for a relatively short period of time.

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, have the highest demand.
 * Law runes, when bought singly, command prices of over 1000 coins, due to the inconvenience to the seller of selling only one rune. However, they can be bought in bulk at coins due to their usefulness in training magic. Also, now that law talismans are tradeable, the prices of law runes are decreasing due to increased supply, 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 are now coins each.
 * Arrows
 * Potions

Finished Items
Since there is little demand for other finished items in bulk quantities, these are normally traded to the stores, or "alched" if the price makes it profitable to do so. A problem for higher level smiths is that although there may be players who would pay more for Mithril items or above, finding them often takes a long time. As a result, trade in finished items is very slow, and players have developed strategies such as smithing "on demand" to compensate. In a departure from real-world economies, finished goods usually fetch lower prices in the Grand Exchange than the components used to make them because there is greater demand for the incomplete article due to the hidden experience point value than there is for the finished product.


 * 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) were often sold to Al Kharid shop for 50 coins each. Since the Lumbridge and Draynor Diary was released, players tend to low alch the leather items as their alchemy value is actually higher than their store value and Magic experience is granted. Nevertheless, the market for leather items is still over-saturated and they are suffering from a perennial depression in Grand Exchange price, down to the low alchemy price.
 * Armour & Weapons
 * Iron and steel armour and weapons are common products of smithing training. They are sold to armour, weapon, and general stores in large amounts every day. It is assumed that few would alchemize them as it is undesirable to do so, unless the player is far from the Grand Exchange, in which case they might use the low alchemy function of the Explorer's Ring.
 * Jewellery
 * Jewellery is often sold to the Jewellery stores (at least before the personalized store update), due to the high value it fetches. Players usually sell large number of amulets or necklaces at once, but some players sell them slowly, contributing slightly to the inflation of prices in the ecomomy.

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 them because of their scarcity.

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 in the old Wilderness, caused the prices of discontinued items to crash. In particular, party hats could not be sold on the Grand Exchange at the minimum price (without a huge stroke of luck) until sometime 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 before the crash in 2007 before the anti-real-world trading updates. "Small rares" followed similar trends.
 * Party hats (all colours)
 * Christmas cracker
 * When the Christmas Cracker was released, it was pulled by thousands of people for a rune item and a party hat.
 * 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 a 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.

Availability
The level of availability of an item also has an effect on the price that another player will offer for it.

The release of the Grand Exchange greatly increased the availability of items to players. For example, before the Grand Exchange, if players wanted to buy bulk quantities of coal, they would 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 or location, or search for threads on the forums selling bulk amounts of coal, also with no guarantee of finding a seller. With the Grand Exchange it became possible to buy large quantities of coal within seconds, as in one offer players 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.

A crafting shop where players can buy moulds close to the furnace where they are used can only be found in Al-Kharid, for example.

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 via player trading or smiths reaching the level required to produce them.

Rare and pseudo-rare items
The genuinely rare items are from the early days of RuneScape and may be found among the Rares and Holiday Drops. In the members' game, rare items are limited to those that can no longer enter the economy due to discontinuation.

There are several pseudo-rare items in the free-to-play game, which are actually available to members and may be traded and used by free players. Some useful items in this category are certain pieces of Black equipment which are unavailable by any means in free-to-play:


 * Black hatchet
 * Black scimitar (However, members can find a Black scimitar spawn point on 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. The remaining Black armour and weapons are sold in free-to-play stores and are thus not considered pseudo-rare.

There are also coloured gloves which that are cheap for members and can be traded to and worn by free players; however, they do not offer any advantage over plain leather. Several pseudo-rares have lost their status due to updates, however, such as the


 * Black full helmet: was a pseudo-rare item before an update caused it to drop from free-to-play monsters.