What’s Up With Used TVs?

June 5, 2012 in Daily Bulletin

Rohin Dhar took a look at the market for used TVs. What he found is likely to surprise you:

  • A lot of people try to sell their used TVs for more than what the same TV would cost brand new.
  • Televisions from Sony seem particularly vulnerable to this trend.
  • A lot of people price their used televisions below market price, of course, but overall in the market there is only a 14% discount to buying a used television. In contrast used headphones and phones sell for more than a 30% discount.
  • One explanation for this is that people don’t realize how quickly their assets depreciate. In one ad a seller offered to sell a $1,500 television that they bought 9 months ago, for just $1,000. This 33% discount sounds impressive until you realize that the retail price of TVs fell faster than that.
  • Another problem is inaccurate product identification. A TV might actually be called something like LG-47LK520 but it will be advertised as the more ambiguous “LG 47 inch LCD TV.” This makes the market less liquid and drives up prices.

To read many more details, and to see some really well designed and fascinating graphs, to find out how this problem can be fixed, what a solution to the problem would look like, to find out what percentage of televisions are correctly identified, which used models sell for more than their sale price, and why buying a used TV is like shopping in a foreign market where you don’t speak the language, click here.

Source: priceonomics

Via: Freakonomics