[PnP] Economics, Inn Ownership

Burton Choinski bchoinski at verizon.net
Sun Feb 16 15:22:47 CET 2014

hello everyone, and happy new year.  It has been a while since I last posted so I figured I may as well put out my simple notes on some economics that I have had to figure out for my local game, just in case others may have similar problems.

Also, a good peer review never hurts...rip away. :}

For my game I have been trying to normalize the economic system and item prices by setting certain assumptions, then following those assumptions through several iterations.  For example, the value of a good equals the labor cost plus materials cost plus some overhead cost for marketing and taxes.  An example would be clothing:
	- A flax farmer must sell his crops and make enough to pay his tithes to his
	  liege as well as purchase his food and other needs.
	- A spinner takes raw flax and spins it into thread; he must make enough to cover
	  his income, the cost of the flax plus taxes.  The thread price is based on
	  the overall cost per pound, plus 25% for merchanting.
	- A Weaver takes thread and weaves it into cloth; he must make enough to cover 
	  his income, the cost of the thread plus taxes, the cloth price is based on the
	  overall cost per pound, plus 50% for merchanting.
	- Finally, a Clothier takes cloth and turns it into clothing.  Again, final overall
	  cost equals all other costs plus 50%
My incomes are based a simplified set of values (all income needs are per day)
	Station 0 - 1/2b
	Station 1 - Labor (1b), Skilled labor (2b)
	Station 2 - Crafter (5b), Master Crafter (10b), Tradesman (5b), Uncommon
	            Tradesman (10b), Pack Trader (10b)  
	Station 3 - Artisan (20b), Master Artisan (50b), Merchant (20b), Master
	            Merchant (50b)
	Station 4 - Specialist (100b), Rare Specialist (200b), Minor Nobility (100b)
For production occupations, the worker is assumed to meet his income needs in 300 days -- this matches the GNI value of 3SC for a station 1 worker.  Crafting and trades make their needs in 240 days (which allows for some play for lean or prosperous years).

My production rates are probably somewhat subjective, but I tried to base them on real-world data or "reasonable" guesses.

So, for the cloth example above:

A Fiber Farmer (1b) produces 1200# of raw flax per year; A spinner (1b) takes this flax and can turn it into 1200# of thread. Flax Thread = 1/2b per pound.

Weavers (5b) can turn 5# of thread into cloth each day (2# for fine cloth). Linen cloth = 3b per pound (1-1/2b per square yard of 8oz cloth).  Fine cloth costs double.

Clothiers (5b) can produce 5# of clothing each day from 6# of cloth. Linen clothing = 8b per pound (8oz cloth, 25b per pound for 4oz fine cloth).

With this as a base, clothing prices can be re-figured, tweaked up for dyes, trim or other improvements, and will mesh with the incomes.  I figured (along the same methods above) that Station 1 eating costs 250b per year, so a station 1 person that does not work extra has 50b per year to pay for other expenses. A 2# set of basic clothing will cost 16b, so while a station 1 person will likely patch and repair his clothing as much as possible, higher stations can afford to have a wardrobe.

I'm still in the process of working this all up, but when complete a reasonable system of costs and values comes up.  A side effect of this is that armors and weapons do not end up as way overpriced for the effects (A bronze Blade ends up at 14CC per pound, so a 7# great-sword is only about 1GC, not the 4GC stated in the book.

Ok, with all that background (so you know where I'm coming from), let me go to the meat of the article.

Inn Economics for Owners
Using "Medieval Demographics made easy" (google search), I used the basic value of 1 inn per 2000 people.  A 4-person managed inn (4 adults, or 3 adults and 3 children) live at 5b/day, so they need to make 20b/day in average income (720CC/year). Assuming the local culture takes 20% in taxes, plus you as the owner getting a 10% cut, dividing this out means the average Inn must pull in 10GC/year. At the 1 inn/2000 rate, that 10GC/2000 equals 5GC of "Inn" per 1000 population.  For a city, increase the limit by 10% per road and by 20% if a port city. I also add an additional 10% for the capital city For the city of Donara, at 36,000 people, this is about 270GC of "innage".  I figure a small inn is worth about 5GC, a Large Inn about 25GC.  If you go with a basic ratio of 10% large, 20% small and the rest medium this comes out to roughly 10.5GC as an average, so I think the ratio is good.

So, what does this mean?  A player or group of players can purchase a medium inn and pull in 1GC a year in profits (if the GM wants to go with the average), or the GM can use this as an game hook when the players try to find out why their inn is losing money. :}

Looking at my worksheet I see I still have to work out the proper construction costs, and thus update my "quick & Dirty" construction rules. I'll have to do that and post them at a later date.

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