Expressed in today’s money, what did a Stradivari/Stradivarius violin cost when it was new?

21 Jan 2021

Abstract (or TLDR): Along with the violins of Guarneri del Gésu, Stradivari violins are the most coveted instruments in existence and can cost millions of dollars today. Here I attempt to estimate and express in today’s terms what a Stradivari violin cost when it was new. Using historic and contemporary data on wages and the assumption that a master instrument takes 150 hours to make, I estimate that a new Stradivarius would have cost the equivalent of $17,000 to $18,500 with an interval of high confidence (but not a statistical confidence interval) within 20 percent of these values, and a plausible min-max range between $10,800 and $28,300.

In 2006 a user named Rachael Hobb asked on the forum of violinist.com what a new Stradivari or del Gesu violin cost some 300 years ago. A curious and interesting question, but the more interesting question to me is what they cost expressed in today’s money. The answer to this question maybe interesting to investors, collectors, and musicians alike. If you are an investor or collector, you might be interested in the long term rate of return. If you are a violinist, you might be looking for some orientation what a fair price would be for a top-shelf instrument judging by the standard of a Stradivari.

We will make the assumption that the making of a master violin takes about 150 hours. This information was taken from a youtube video of a Swiss master luthier. Online sources vary widely between just under 100 hours to 200 or even 250 hours to make a violin. Thus, 150 seems like a fair middle ground. These 150 hours are almost exactly 1/12 or one month of a person's annual labor input, assuming a 40 hour work week, six weeks of vacation, and one week of bank holidays (which is pretty standard in Europe). A contemporary Cremonese master luthier (Vittorio Villa) states on his website that he has made more than 300 instruments in 30 years or about one instrument per month. This productivity is historically corroborated by another source (Jarosi and Fiedler, 1935, p. 120) and triangulates well with the statement of the first source and the working hours in a month. This lends credence to our 150 hours per violin assumption.

The second piece of information that we will rely on is the average annual wage in Western Europe. Average annual wages are US $39,200 in Italy, US $45,600 in France, and US $53,600 in Germany (source: OECD). Using the average wages from Italy and Germany above (France falling in the middle) and assuming that a master craftsman earns or pays him- or herself an average wage, the pure wage value of a violin would amount to $3,267 to $4,467. This does not include social insurance (health, retirement, etc.), for which one would have to add about 25 percent, the costs of the material to make the violin, appropriate cost apportionments for the maker's workshop and tools, and the costs of sales. Thus, a handmade master violin cannot be made for much less than $5,000 to $5,500 in Italy and $6,500 to $7,000 in Germany today.

Note that this cost-based estimate does not include a profit margin for either the maker or the violin shop. So far we only assumed implicitly that a master luthier bought the inputs, made a violin, sold it, paid rent for and ran a small workshop, wrote off the equipment, and made an average living doing all that. Obviously anyone running a business would be interested in making a profit by selling at a price higher than costs. Luthiers that cannot cover their costs and make a living would exit the market. Luthiers that cover the costs would stay in it. Successful luthiers would be able to charge above costs.

Demand for Stradiviari's instruments exceeded supply by the master himself. The fact that he had a workshop and employed others to help him make them and the number of instruments bearing his label are prima facie evidence for that. Clearly thus, Stradivari would have been able to charge above costs. The problem with the cost-based approach is that even if we knew Stradivari’s costs precisely, we do not know just how much above costs he would have been able to charge. We know that Stradivarius did not exit the market because he ran his workshop to the end of his life and made money doing so. Because we do not know Stradivari’s profit margin, the cost-based approach “only” provides us with a floor for the estimate of what a Stradivari violin would minimally have to cost in today’s money in order for Stradivarius to have covered his costs and afforded an average living. Any amount lower than today's costs is simply not a plausible estimate, but the approach does not lead us any further than that.

We get a hint for the price of a new Stradivari in the 18th century from an answer to Rachael Hobb's question. A user named John Taylor quotes "Antonio Stradivari: His life and work 1644-1737" (p. 249) by the heirs of William E. Hill & Sons as writing that a Stradivari violin or viola cost 10-15 pounds Sterling at the time. With 250 years experience in the trade and having commenced business operation only about one generation after Stradivari’s death, W.E. Hill & Sons are a highly reputable, trustworthy, and thus our best bet for a reliable (meaning accurate) source. Knowing what a Strad cost in pounds Sterling at the time remains an unsatisfying answer, however, as I am looking for an estimate for what 10-15 pounds at the time would mean today.

Since W.E. Hill & Sons commenced operation in 1762, we will assume that their statement for the price of a Stradivarius refers to Stradivari's late period around 1730 (Stradivari died in 1737). If they referred to an earlier (a later) period, we would have to adjust the estimate for the price of a new Strad in today's money upward (downward), respectively.

The first way to arrive at an estimate is to use information from the British national archives (https://www.nationalarchives.gov.uk/currency-converter/), and convert 10-15 pounds in 1730 into today's money. According to the archives, fifteen pounds in 1730 were the equivalent of 1767 pounds in 2017. Adjusting for the four years that have passed since 2017, this would yield about 1850 pounds or $2527 in 2021. Knowing that Stradivari's instruments were prized in his time and that he turned a profit, this sounds too good to be true. This is also contradicted by our cost-based estimate, which put the floor for a master violin at $5,000 minimum.

Luckily, the British national archives also provide some purchasing power benchmarks. In 1730 fifteen pounds would have bought one of:

2 horses,

3 cows,

31 stone of sheep's wool,

9 quarters of wheat, or

150 days of wages of a skilled tradesman

The estimates based on animals and agricultural commodities such as horses, cows, sheep's wool, and wheat would have inherent problems. Horses and sheep's wool are no longer in widespread use. Cows and wheat have gotten more plentiful and productive, which could throw off our estimate in unpredictable ways. An estimate based on working hours and (days of) wages, however, seems ideal because a master violin is handmade today just as it was 300 years ago, meaning there are few productivity and use changes that could interfere with our estimate.

It seems fair to assume that in Catholic Italy a skilled tradesman would have worked 6 out of 7 days per week without vacation in the 1730s, totaling 312 workdays in the year. Ten to fifteen pounds Sterling for one of his instruments would have entitled Stradivari to the equivalent 100 to 150 days of the wage of a skilled tradesman according to the British national archives. This implies a share of 32 to 48 percent of a skilled tradesman's annual wage. If we assume that a skilled tradesman earns somewhere between -10 to +10 percent of the average wage today (using the OECD data above), then the price of a Strad in today's money would amount to roughly $16,900 at the low end (for an Italian tradesman earning 10 percent below the average wage in Italy) and $28,300 at the high end (for a German craftsman earning 10 percent more than the average wage in Germany) for a Strad that cost fifteen pounds in 1730. Analogously, it would amount to $11290 at the low end and $18867 at the high end for a Strad that cost ten pounds in 1730. Assuming the average Strad was priced in the middle of the 10 to 15 pound range and crudely averaging German and Italian average wages puts the point estimate at (39200+53600)/2*0.4= $18560 in today's money.

Despite the wide interval ranging from $11,290 to $28,300, the estimates based on average wages generally appear good and right. Basing the estimate on labor is sound and appropriate because the making of a master violin requires as much manual labor today as it did then (even though workshop violins can be made with the help of computerized machinery today, master violins are made using manual labor exclusively).

We can also take a slightly different approach to estimating the price of a new Strad in today’s money by using data on historic wages. The advantage of this approach is that it allows us to do away with the arbitrary assumption that a skilled tradesman earns a wage within 10 percent of the average wage today.

Williamson's "The structure of pay in Britain, 1710-1911" (1982) lists the annual wage in 1737 among other years (coincidentally the year Stradivari died). In 1737, the annual wages of teachers and agricultural laborers are listed as 15 and 17 pounds, respectively (assuming they worked year round, which may be realistic for teachers, but is unrealistic for agricultural laborers. However, it may be realistic to assume that agricultural laborers worked similar jobs requiring manual labor at a similar rate for the rest of the year.). The wages for teachers and agricultural laborers are the lowest wages in the list, suggesting that we might equate these jobs to minimum wage jobs today. Today, a minimum wage job in France earns 1555 Euros per month by law, in Germany about 1700 Euros per month (accounting for a lower hourly minimum wage but longer work hours), and in Italy an estimated 1250 Euros per month (Italy does not have a minimum wage. The value derives from making a proportionality assumption of the implied Italian "minimum wage" to the German minimum wage based on the OECD's average wage data and assuming German work hours) (main source: https://wageindicator.org/salary/minimum-wage). This equates to implied monthly minimum wages of $1500 in Italy and $2040 in Germany (France falling in the middle), accruing to $18,000 and $24480 annually, respectively.

With this information in hand, we can estimate the price of a new Stradivarius in today's money as follows: If a Stradivarius cost 10 to 15 pounds at the time, these 10 to 15 pounds would have been somewhere between 60 (rounded) and 100 percent of the "minimum annual wage" in 1737 (10 pounds for the Strad divided by 17 pounds annual wage for the laborer roughly equals 0.6 or 60 percent and 15 pounds for the Strad divided by 15 pounds annual wage for a teacher equals 1.0 or 100 percent. This provides a lower and an upper bound for the share of the annual minimum wage a Stradivari might have cost in 1737). To get an estimate for the price of a new Strad in today's money, we simply apply these shares to today's minimum wage. Sixty to one hundred percent of today's estimated annualized "minimum wage" would be $10800 to 18000 in Italy and $14688 to $24480 in Germany. If we middle the bounds and assume a new Strad cost 0.8 times the annual "minimum wage" in 1737, and if we crudely average the Italian and German minimum wages today, the point estimate for the price of a new Strad in today's money equals (18000+24480)/2*0.8 = $16992.

Result: Based on these back-of-the napkin estimates, my best guess is that a new Stradivarius would have cost the equivalent of $17,000 to $18,500 +(-) 20 percent in today's money with an overall plausible range between $10,800 and $28,300. That still seems like a bargain for a high-quality item that brings many people joy and can last more than 300 years.

After this estimation, I went on the Internet to look up the prices of contemporary master violins. I did this afterwards because I did not want my estimates to be influenced or biased by this knowledge. Using Google search, I stumbled upon two blog posts from 2017, coincidentally also on violinist.com, reporting on tests of 30 modern Cremonese and 50 modern American violins, respectively. The Cremonese instruments were made between 1998 and 2017; most of the American instruments were made after 2010. These instruments can thus be deemed new for our purposes. What is interesting for the purpose of this writing is that these blog posts provided price ranges for the tested instruments. The Cremonese instruments ranged from $11,500 to $29,000, whereas the American instruments ranged from $7500 to $48,000 with "most" falling below $20,000 and "many" falling below $15,000. In other words, a handmade, high-quality, master violin is about as expensive today as it was in Stradivari's days. Of course, for that deal to be fair, one should also get Stradivari level quality. But this seems to be the case based on findings that professional violinists do not favor Stradivaris or del Gesus over new master instruments in blind tests (Fritz et al., 2012).

Does that mean that your new high-quality violin is collectible and will be worth millions of dollars (or SpaceCoin) 300 years from now? Time to speculate. It is hard to tell, but probably not. As we live through the centuries, violins, in particular high-quality violins, will likely keep accumulating. They will likely keep their value for being high quality, master instruments (unless we get rid of classical music), but a decrease in the scarcity of this caliber of instruments over time will likely mean that the value of the newer instruments will not appreciate in the same way the violins of the old masters did. Moreover, since most modern violins are copies or mere adaptations of the old masters, these holdovers from ancient times will likely always retain their primacy when it comes to historic appreciation and collectibility. Finally, if you are hoping that your instrument is going to be worth $10 million in 300 years from now and you pay $20k for it today, your annual rate of return is 2.1%. If you are looking for an investment that makes money rather than just preserves value, you should probably look somewhere else.