I have been wondering what a gold piece is worth, due to the fact there are many things that cost the same, but in reality, are probably worth radically different prices, such as a Goat and a Whip, which both cost 1 gp.
What is a gold piece really supposed to be worth? Like, how would things be priced if they were in familiar modern monetary units instead of "gp"? That would give me something to base my adjustments to abnormal prices on, such as items not listed in the PHB.
...because things don't have the same relative values in our world as they do in a typical medieval-style adventuring world that is pre-industrial, but has magic.
As you've already noted, 1 GP is worth about 1 goat or about 1 whip. It's also good for 2 nights' stay in a modest inn, or 5 gallons of ale. On the other hand, it's only 1/25th of the price of a 1 lb hourglass, 1/50th the cost of a chain shirt, or 1/1000th the price of a spyglass. These aren't items that are all of equivalent values in modern terms, so it doesn't make sense to try to assign a modern value to a gold piece. The gold piece has value exactly in relation to what kinds of items one can purchase with it.
Today (May 2015) you could get:
So, by using modern item values, we might say that 1 GP is worth somewhere between 15 cents and $200 in $US.
But before you dismiss the prices as being "inconsistent" with modern values, consider your setting. Relative prices are much different now. Many things are much easier to make, and the cost of hand labor is reduced. Other things may be more in demand or uncommonly made now, and cost relatively more. If you want to build a more modern setting for your world, you might as well just use a modern currency.
As @KRyan notes in the comments:
It may be worth noting that historians also generally consider it impossible to give a decent sense of what real world currencies were worth in the not-so-distant past. There is no meaningful conversion of 18th-century US dollars to 21st-century US dollars. There have been times and places where an entire house was worth less than the nails used in its construction, to the point that people would burn down their houses and collect the nails from the ashes before moving.
See Were iron nails at one time so scarce that pioneers in America burned down their cottages to retrieve them? on [skeptics] for more information on that.
Additionally, as other answers have noted, the developers set prices with game balance as a higher priority than the creation of a realistic economy.
The relative values are based upon tradition ... the prices are very similar to Gygax's own list in the AD&D rules, which is an expansion of the material in the original D&D game.
Gary Gygax, however, probably did not make them up on the spot. In comparing various price lists in various games, Gary's numbers routinely come up around 1gp equaling one roughly 11th Century shilling. Looking at Hodges' list ①, most of the prices come pretty close.
A few words about medieval English Coins; they were specie. The values were based upon weight and purity, and the rosy picture of relatively stable prices and uniform coins are an artifact of Fantasy. The nominal base units were the penny (1 dwt of silver), the shilling (12 dwt of silver), and the pound of silver (240 dwt). Gold coins of roughly equivalent value were used. The "gold penny" was a 1dwt coin of gold (debased with copper, tin, and zinc), nominally worth 12 to 20 pence. It was generally accepted as 12 pence, hence a shilling's value - but often was valued more.
Note also: dwt (pennyweight) is a part of the troy measures system - 20 dwt to the troy ounce, and 12 trounces to the troy pound.
With the above considered, the GP probably has its origin in the gold coin nominally worth 1/20 of a pound of silver. 12 dwt is about 18.67 g, 3x modern £1 coin (within 0.2g). Not a light hunk, but still less than the current £5. And the current UK penny is roughly 2.3 dwt.②
5E returns to the "everyone but Gary & Tom" 50 coins to the pound. We don't know which pound, so we'll assume avoirdupois, at 291.67 dwt. This converts to 5.834 dwt to the coin, or about 9.1 g. This is about the same as the current UK £1, or 4 US dimes. If we instead use Troy Pounds, at 240 dwt each, 4.8 dwt is 7.4g, a touch lighter than the 50p or the US current presidential dollars.②③
Knowing that the gold penny was roughly 1 shilling in value at lowest, we can see where it originates. The fantasy weight of 1/10 pound (in some editions) and 1/50 pound (in the rest) is probably because of looking at debased silver shillings (12dwt) and copper pence.
Wine, hodges lists at 4d to 8d per gallon (1/3 to 2/3 of a shilling), while 5E lists it as 2sp to 10gp... so, 1/3gp to 2/3 GP, vs 1/5 gp to 10gp. A wider range. Probably not the same source, but clearly includes the Hodges range if a shilling is a gold.
Tunics, peasant. Hodges says 3s, with shoes 6d and a chemise 8d.
5E shows half a gp for common, 2gp for travelers, so, yes, we're in the ballpark
Axe, woodsman's - 5d by hodges, 5 gp by 5e.
University boarding: 2s/week, by Hodges, 1.8gp/week for poor by 5E. Close enough.
The only armor which is a clean match is leather at 5s being 5gp. The others, however, are in similar ranges.
A cheap sword in Hodges is 6s, so that would be 6gp, but D&D traditionally uses 10gp.
In short, the list is close enough that it looks like, between Gygax's original research for D&D and AD&D, and modern reworks, the prices are taken from scholarly lists of prices from the medieval period in England and France, both of which used similar currency divisions (£, s, d).
If expanding the lists, keeping in mind medieval sources can help keep the prices roughly in line, and that any given list is neither authoritative nor more than just a snapshot.
① Hodges, Kenneth. List of Prices of Medieval Items
http://www.luminarium.org/medlit/medprice.htm
② Royal Mint. Coin Designs and Specifications
http://www.royalmint.com/discover/uk-coins/coin-design-and-specifications
③ United States Mint. Coin Specifications
http://www.usmint.gov/about_the_mint/?action=coin_specifications
1gp is 1gp is 1gp.
1 gp is worth 2 ep, 10 sp or 100 cp.
That's it.
Gold is defined to be worth that amount, and that's all there is to the economy in D&D.
Though the specific items that you can purchase differ widely, the prices are set by the designers. So an item that costs 1gp has the same worth in the economy as another item that costs 1gp. Obviously, if your DM wants to change the prices, he's totally in bounds to do that, it's his game, and prices can and should vary by setting.
So basically, if a goat and a whip are each worth 1gp, a farmer would likely consider a nice, adventurer-quality whip handed in trade for a goat to be a fair deal.
It's worth noting that D&D is a complete and utter command economy. And designing a functional, working, economy is not generally regarded as a design goal for D&D. Things are given prices with some regard to fictional reality, but not very much. Ultimately, if you're concerned with the economy being functional, you probably want to import another economic scheme or find a different game.
As shown in other answers, trying to relate 1 gp to a current dollar value is nigh pointless, there's not going to be a consistent currency exchange to be found based on the items that you can purchase in the game (And the economies are so drastically different it's not remotely comparable). The best way to think about it is that 1gp is something like the $20 of the D&D world, it's not the largest unit of currency (that'd be astral diamonds), and it's not the smallest (that'd be the copper piece, the equivalent of a dollar, or maybe even a quarter..it's probably not a penny).
All that to say, trying to do a direct conversion from gp to dollars (or other modern currency), just isn't productive. Think of it as a unit of currency and not much more.
Why does a whip cost as much as a goat? Because the designers figured that was a good cost for both. You can carry a pile of swords into town, only get 50% of their value, but the price to buy a sword doesn't change - because the designers don't want you playing merchant.
There's plenty of examples of where D&D pricing makes no sense economically. My personal favorite is that in 3.5, you can buy a 10 foot ladder for 5 cp (or 0.05gp), saw it in half, and you now have 2 10 foot poles, which even at the 50% mark down net you 1 sp (0.10gp) each. So at first level, the smart adventurer should be busily buying ladders, breaking them down to poles, and selling them for 200% profit.
For practical advice, if you're serious about playing a mercantile campaign (where you plan to do a large amount of buying and selling), you're going to want another system (either in addition to D&D or instead of).
You can look at the gold piece (GP) kind of like the American Dollar. It has whatever value people assign to it. The goal of having a currency is to give a universal portable way to conduct transactions. In the D&D universe gold is that currency. There are a few abstractions though.
Universal value For ease of use the game system assumes that every region values goods the same way, i.e. a tiny farming town values a whip as much as a merchant in Waterdeep.
There are few other currencies. Unlike the real world, most countries all settled on a single choice. There are some localized currencies described in the core books, but they are more for fluff than anything.
It's all from an adventurer's perspective. When an adventurer needs a goat in a hurry to lure out the hydra, he doesn't shop around or buy in bulk. If you bought a whole herd of goats, or maybe found a farmer down on his luck, you might be able to get a goat for less than 1GP. The list price represents a cost that any merchant would gladly sell that object at.
Estimated real-world value: ~$50 - This is a very tough way of looking at item costs. It would be more effective to think in terms of rarity and amount of work required. In short, there isn't a very good estimate for the previous reasons, but we'll try here.
If we use the items from earlier, some quick Google-fu shows that you can get a decent quality bull whip for ~$40 and a goat for around the same ~$50. So using just those 2 items a gold is worth roughly $50. It doesn't work as well though when you look at something like a stay at an inn. I'd be hard pressed to find anything above the most middling hotels that would offer me a room for less than $50, and one night in an inn costs less than 1 GP.
Most of the answers seem to be going by the purchasing power route, but to answer it by the simple expedient of what that amount of gold is worth:
(That said, pay good attention to Allen Gould's answer-- this is a pure thought experiment, it isn't going to help you make any sense of the prices in the PHB!)
That depends on where you are, and when you are in your game setting. The worth is influenced by how much "the game economy" interests the players and the GM.
Regarding your included question on abnormal prices, why not consider the following from the PHB as the point of departure?
PHB Table Extract. (p. 157).
| Cost | Trade Goods |
|---|---|
| 1 cp | 1 lb. of wheat |
| 2 cp | 1 lb. of flour or one chicken |
| 5 cp | 1 lb. of salt |
| 1 sp | 1 lb. of iron or 1 sq. yd. of canvas |
| 5 sp | 1 lb. of copper or 1 sq. yd. of cotton cloth |
| 1 gp | 1 lb. of ginger or one goat |
| 2 gp | 1 lb. of cinnamon or pepper, or one sheep |
| 3 gp | 1 lb. of cloves or one pig |
| 5 gp | 1 lb. of silver or 1 sq. yd. of linen |
| 10 gp | 1 sq. yd. of silk or one cow |
| 15 gp | 1 lb. of saffron or one ox |
The 5E table above provides context, and a rough relative value for a pseudo-medieval setting that is the game's basis. As noted by others, this carries over from earliest editions' "Western Europe Medieval / Feudal" default environment.
Note the prices on spices in the table. Spices were very expensive in medieval times. They were the source of mercantile fortunes on the order of the Tech / Dot.com fortunes of the modern day. Seeking fortunes in the spice trade led to the discovery of the New World, among other things. Another commodity of ancient value was salt.
For centuries salt had far greater trade value than what we see today as a mundane condiment and cooking material. Spices are still more expensive than salt.
The table provides some Order of Magnitude value comparisons. The values are rough. They offer opportunities for game play color / flavor in the shape of treasures.
Example: Trade Goods as Treasure
Your party finds three bolts of silk as part of a treasure once the ogre is dead. Yards and yards of it. (30 yards would be ~ 300 GP). Treasure indeed! Silk in the default setting is very valuable.
Example: Varying PHB GP values with a change in setting
Your game setting moves to somewhere modeled after medieval-era Damascus, Baghdad, or Samarkand. Your GM could cut in half or less the prices for some of these commodities since outside of the Western medieval context, the wholesale / closer-to-the-source markets would sell these goods for less. If the base adventure is set in a silk producing region, perhaps the GM cuts that cost drastically. An evening's adventure becomes: "The party are guards for the silk / spice caravan journeying into the barbarian north where they pay in silver and gold for this stuff. Between us and the market are Brigands and Bandit and Bugbears (oh my!)"
Example: cattle as a trade good versus investment property
Values are inexact. At 10 gp for a cow, why is an ox worth 15 gp? The ox, a draft animal, can help raise cash crops like oats or wheat. A bull might be more valuable as it can increase one's capital / herd. (Consider stud fees ...) Oxen were typically neutered to make them more controllable as beasts of burden. A dairy cow turns grass into milk -> butter or cheese. Is she the better value if you keep her healthy?
Back to game play: how many cows (or camels or llamas or goats) must I offer in trade for a chain shirt that our fighter needs? The PHB GP values give you a place to begin for answers to that question. But wait, where did you get all of those cows? Is there someone looking for a party of cattle rustlers? More in-game play depth to the game economy.
How deep into trade, cost, and value are your players going to enjoy in this game? Is it more important at low levels, when gold is scarce, or at higher levels when your players may have castles, holdings, retainers, and henchmen? If you need money to raise an army to fight large hobgoblin raiding parties, economics can play a larger role.
A gold piece is worth as much as it needs to be for the playing of the game to be fun for the GM and the players. The Trade Goods table, and the costs on the various equipment tables in the PHB, all provide a frame of reference from which you can modify costs per whatever impacts on the game economy you choose to introduce.
Basically, the Gold Piece (GP) has been the standard unit of currency in D&D since the beginning. Why? Because something had to be. You should also note that historically, the GP was used as a measure of weight (IIRC, 10 GP weight was 1 pound). Also, back when TSR published the books as stone tablets (joke here guys. Obviously they never did that), you would get 1 XP for every GP you found (other items of treasure counted as XP in the same way, which is why there were monetary values for magic items in the old books).
Now, as far as GP goes, you can think of it as a dollar (or other decimal based currency). With this in mind, a Copper Piece (CP) would be like a penny, Silver Piece (SP) would be a dime, and Electrum Piece (EP) would be a 50 cent piece (although they were rare and a gold/platinum alloy) and a Platinum Piece (PP) would be a $10 bill.
Now, looking at your comparison of a goat and a whip, each being the same value... think about this in the world of your favorite fantasy books. A farmer would have very little use for a adventurer's whip, in fact, it would be fair to say that the whip is much more rare than a goat. Having similar values is reasonable. What else can you buy with that GP? 10 night's stay in an inn, for instance. Can you, in the modern day, sell a goat and have enough money to pay for 10 nights in a hotel? Probably not. Could you in 12th Century Europe (standard technological setting for most fantasy novels and games)? Honestly, maybe, but I don't have barter records for things like that.
TL;DR
GP is just a unit of measure that is more or less arbitrary to allow you to buy something one place and pay about the same amount for the same thing someplace else.
Additional info: Today (May 12, 2015) gold is selling for $1190 per ounce. 12 Troy Ounces to a pound would yield about $14,280 for a pound of Gold. Using the standard D&D weight of 50GP to a pound, we find that each GP would be worth about $285, assuming that the gold is commodity quality. Gold is very soft and wouldn't last long with all of the adventurers carrying it around, dragons hoarding it up and goblins stealing it, so we can assume that there would be some other medal (most likely Copper) in there. Just for easy math, we'll assume that each GP would be about $250 in today's US currency.
So, the room that you paid 1 SP for was around $25, and when the "noble" in your party upgraded, he paid $250 for the room (I'll bet they didn't even put a mint on his pillow!).
All kidding aside, it's best to just think about GP as an arbitrary currency because something has to be and it might as well be GP (it could be Rubies or something else). GP use originally used because everybody knows what Copper, Silver and Gold are.
All of these answers have looked at the value of the gold piece as currency. For my take on this see my answers to:
The value of a gold piece, like the value of a dollar, is equal to what someone will give you for it - this depends on supply and demand and the relative negotiating abilities of the parties at the particular time in the particular circumstance.
Gold is money in D&D and it is money in our world - the value of one form of money against another (e.g. AUD, USD) depends on the exchange market - there is no real equivalent of this in a D&D world.
Unlike our fiat money, gold is a commodity money - that is, it has intrinsic value. Heat up gold coins and you get gold bullion, heat up dollar bills and you get ash.
No one has taken the question at simple commodity value. A gold piece is 1/50 lb or 0.32 oz, at 10:14am (Australian Eastern Time) on 12 May 2015, 1 oz of gold was worth 1,183.44 USD. If a gold piece is pure gold, then it is worth 378.70 USD as bullion. As a gold piece it is worth 10-15% more than that based on the historical values of commodity money - the 10-15% representing the degree of trust in the exchangeability of the money.
Compare this to silver at $16.25/oz and copper at $0.18/oz. This gives:
1 oz gold = 72.8 oz silver = 6,574.7 oz copper
To make 1gp = 10sp = 100 cp and assuming they are the same weight and that to cp is pure copper, the sp is about 11% silver and the gp is about 1.5% gold at todays valuations - clearly ease of use has won out over realism as it always should.
It's hard to directly compare value, because some things are much cheaper in the modern economy. See, for example, a sheet of paper (0.4gp each).
However using the 'armour standard', a full suite of plate today will set you back around £5750 (~$9000) for a '1500gp' suit of armour. That puts the GP to dollar ratio at about 6.
But a goat — you can get a pair for around $125, putting the GP to dollar ratio at around 60.
Hemp rope — 1gp for 50 ft. Today, 36mm hemp rope is around £13/meter. So 50 ft. is $300.
I think pretty fundamentally, it's just very hard to converge the prices — they're largely arbitrary, and geared around game balance. Doubly so when you start straying into magic item territory — after all, if you need a '500gp diamond' to resurrect someone, then that'll make diamonds something of a significant demand item, above and beyond 'normal'. (I might suggest all diamonds would be this price, as the price is the determining factor in its usage).
If your goal is to determine how much an item should cost in the game, it does not work to see what it costs today and apply a single conversion factor. This is true, no matter if you base the conversion factor on the value of gold, or the value of a basket of goods determining what they cost in the game and in current currencies.
The reason is that modern manufacturing, technology and automation has massively changed the cost to create some things, like the cost to manufacture a teapot, but has little influenced others, like the cost to raise a living animal.
Instead, if you want to estimate how expensive something would be, you can base it on how much the raw materials would cost and how much the labor would cost. You can apply a profit margin on top of that, if you like.
Materials: many raw materials are available from the list of trade goods. For those that are not, you could estimate it from exisiting items based on the crafting rules in the PHB (p. 187) that state half of the cost is material. For example, leather is not on the list. Leather armor is made of leather, weighs 10 pounds and costs 10 gp, meaning a pound of leather could cost up to half a gp. This is not exact, but it can give you an idea.
Labor. The cost of labor is given as 2 sp per day for an unskilled laborer, or 2 gp per day for a skilled laborer (see Services, p. 159 PHB). Most goods that require crafting will need a skilled laborer. This is a bit less than the 2.5 gp of labor a PC can provide per day under the crafting rules, but PCs are above average individuals.
Riding Saddle. Manufacturing a riding saddle in reality takes about 50 hours of work by a skilled laborer, and that work has not changed much due to modern machinery or automation. At 8 hours and 2 gp per day, the saddle would cost 12.5 gp in labor to manufacture. A saddle weighs around 25 pounds, at 0.5 gp per pound that adds another 12.5 gp for leather cost, for a total price of 25 gp. For comparison: the actual saddle in the PHB costs 10 gp.
Spyglass In medieval times lenses were made from gemstones, typically beryllium. Chrysoberyl according to the DMG p. 134 cost 100 gp per gem, and you need two, plus you need some finely wrought copper for the frame, a pound of which costs about 0.5 gp, neglibible in that context. If we estimate it would take about 30 days to grind and polish the lenses and manufacture the precision housing, we would be at 60 gp labor. The total cost for the spyglass would be 260 gp. For comparison: the spyglass in the PHB costs 1,000 gp.
You can see it's not perfect in reproducing the prices of existing items, but it gives you a ballpark result (and for the spyglass, maybe one that is more reasonable than the one in the PHB -- that must be some pretty large and costly gems in there).
For practical purposes, you probably can spend your prepration time better than doing this, unless you enjoy reading up on how things were done. Either use a price from the internet where sombody has already done the work, or frome a similar game with more comprehensive price lists (Pathfinder comes to mind), or just ballpark the price based on other items on the equipment list.
