Monday, August 17, 2009

Freakonomics looks at used bicycle prices

Freakonomics blog contributor Robin Goldstein decided to get an inexpensive, used bike to get around like the natives on his recent visit to Portland, Oregon. What he discovered, however, is there is no such thing as "used" and "inexpensive" when it comes to bicycles in Portland.

Yeah, the bike guy answered, he had something super-cheap for me, an old road bike that they’d fixed up. It wasn’t exactly my size, but it would do. It was a 1991 model, a Trek, I think. It was in good working condition, it had some newer components, and it came with a warranty. I could have it, he said, for $475.

So I started looking at Craigslist — not just in Portland, but in other cities too. I looked at a wide range of midsized-to-large cities that I thought represented a diversity of urban layouts, bike prevalence, wealth, and so on: Austin, Miami, New York City, Phoenix, Portland, San Francisco, and Seattle.

From each of these cities I collected an extremely basic data set: the asking prices for the 50 most recent cars, trucks, and bikes advertised. Then I looked at the medians. Here’s what happened...

In the chart that Robin created, there's an inverse relationship between used car prices and used bike prices. In other words, in cities where used bike prices are the highest, used car prices are the lowest.

Read more at Freakonomics blog.

1 comment:

Anonymous said...

Poor Robin is running out of things to do. "I didn’t run any serious statistical tests on the data set." OK arbitraging regional markets can be fun but a well cared for old bike is worth quite a bit if well maintained. Heck many of my bikes that are over 30 years old are worth more than most new bikes...

His conclusion speaks volumes: "what struck me about this informal little analysis was that not one city fell out of line in the inverse order. Where cars were selling for the most, bikes were selling for the least; where cars were selling for the least, bikes were selling for the most". Car culture v. People culture Robin, it's that easy.