The economics of physical objects

In a story in the Daily Telegraph (other news outlets are available), apparently, an antique bed that lay dismantled and discarded by builders in a hotel car park is now thought to have belonged to King Henry VII and could have been where his sons Arthur and Henry were conceived. 

The bed had previously been sold at auction before its royal provenance was established (by DNA testing) for £2,200 (quite why a two-grand bed of obvious ornate beauty and even casually obvious historic value would be left discarded in a car park seems hard to fathom, but hey), but is now estimated to be worth £20million in the light of its royal patronage. 

This is a powerful illustration of the economic power of objects. More specifically, when multiple sources of value — scarcity, intrinsic and origin stories — combine, the value can be multiplied. The scarcity and intrinsic values were already established by its previous auction value of £2,200, but the establishment of its connection to King Henry added another layer of value. If the object had been something of less or negligible beauty, scarcity or intrinsic value — like a cup or a vase — the resultant value would be far less. 

To try and establish an economic principle, if we imagined it was a cup of negligible intrinsic value (£1), it wouldn't be unreasonable to assume that if it had a proven connection to King Henry VII, it could be worth £9,090 (I can imagine that sort of figure delighting someone on The Antiques Road Show). So by dividing £9,090 by 1, we can establish a principle that each source of object's inherent value might multiply together to create its ultimate value — i.e. the bed's intrinsic value was £2,200 but when multiplied by its origin value (£9,090), it then becomes worth £20million.

There's obviously much more thought to be put into these kind of calculations, and no doubt someone has already done the work, so I'll have a poke around and see if I come up with anything.