What does "lower item cost " in magic item creation cost mean?

Question

In Creating Magic Items in the table "Estimating Magic Item Gold Piece Values" under "Base Price Adjustments" it says for multiple different abilites that the price adjustment is to "multiply the lower item cost" by 1.5.

What is meant by the "lower item cost" ? Is it the item that costs less? Or the lower caster level? Or the lower spell level?

As an example, a player of mine wishes to improve a rod with a use activated shield effect (cl 1) which cost him 2'000 gold pieces with a dispel magic effect (cl 10). My questions are these:

• Which is the lower cost that has to be multiplied by 1.5?
• Assuming that the lower cost is that of the shield effect and as magic items have only one caster level, the caster level for the shield effect would also increase. Am I correct to assume that it would increase by 18'000 gold pieces?

Answer 1

While the Table Table 7–33: Estimating Magic Item Gold Piece Values (Dungeon Master's Guide 255) probably could be clearer, the Magic Item Compendium really is. In the Compendium on Creating Magic Items, in part, says

In most cases… the cost of adding any additional ability to that item is 1-1/2 times the value of the added power (or the value of the added power plus 1/2 the value of the existing item, if the added power normally costs more than the existing item). (233)

So when the Dungeon Master's Guide says cost it means the power's computed value rather than, for instance, caster level or spell level.

That said, no magic item that I'm aware of has, by default, different caster levels for its different effects (e.g. there's no published magic item like a rod of shield and dispel magic that can generate a shield effect at caster level 1 then also generate a dispel magic effect at caster level 10). However, as both the Dungeon Master's Guide and—more explicitly—the Magic Item Compendium allow combining existing items with no caster level adjustments up or down for the added items, adjudicating combination items already shouldn't be that big of a deal. (For example, a magic item can totally have multiple magic auras if scanned with a detect magic spell, and this GM uses the highest caster level to determine if a magic item is temporarily rendered nonmagical by a dispel magic spell.)

That is, if the DM who is using the Variant: New Magic Items (DMG 214) allows a magic item creator to research then create a new magic item that's a low-value rod of shield that has a caster level 1 then research and create a new magic item that's a higher-value rod of dispel magic that has a caster level of 10, the creator may then want to add the ability of one of those magic items to the other. To compute that items's total value, take the value of the item with the lower value, multiply that by 1.5, and add that result to the other item.

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Note: This DM suggests actually using those Variant: New Magic Items rules—that make creating new magic items as difficult as Researching Original Spells (see this question and DMG 198)—or a similar method rather than allowing PC item creators to create on a whim any ol' magic item they can think of using 7–33: Estimating Magic Item Gold Piece Values. This very site and online forums agree that player-created new magic items using in isolation only the table can be incredibly disruptive, and, instead, all new magic items should have their prices set by the DM after the DM's compared the new magic items' prices to similar existing magic items' prices, with the DM using the table only as a last resort.