This document analyzes characteristics of vintage Gibson Les Paul, Fender Stratocaster, and Fender Telecaster guitars produced between 1950-1975 and their effects on current auction prices. It examines how factors like year of production, condition, finishes, and refurbishment influence prices. Data on 335 recent vintage guitar transactions is used to quantify variables and conduct a regression analysis to determine which characteristics most significantly impact today's market prices.

1. “Vintage guitars: An analysis of vintage guitar characteristics and their effects on current
auction prices”
Garrett E. Simmons
Walker College of Business
Appalachian State University
Boone, NC. 28608
919­612­6179 (phone): ​simmonsge@appstate.edu
Keywords: Vintage Guitars, Refurbished, Auction, Les Paul, Stratocaster, Telecaster
ACKNOWLEDGEMENTS
The author thanks David Dickinson (Appalachian State University) for his helpful comments,
research assistance and regression analysis, as well as Dave McEvoy (Appalachian State
University), for his additional assistance towards regression analysis.

2.
“Vintage guitars: An analysis of vintage guitar characteristics and their effects on current
auction prices”
ABSTRACT
This paper uses data on “vintage” Gibson Les Pauls, Fender Stratocasters, and Fender
Telecasters produced between 1950­1975 to estimate which specific characteristics significantly
affect the present day auction prices of each guitar. The make, model, year of production,
condition, finish, and reissue are all hypothesized to play their own role in contributing to the
current auction price of a vintage guitar. My first result is that each additional year of age is
significant to the present day price. Furthermore, guitars produced in a “golden era,” before
1965, are valued higher than ones produced after. A second result is that a refurbished guitar is
valued significantly less than one completely unaltered from its original state. Condition is
shown to be significant only if the guitar is non­refurbished. A third result is that specialty
finishes and modern day reissues increase the present day prices of vintage guitars. Though each
model has a vintage value, the guitars are not perfect substitutes. Certain characteristics have a
more significant effect on certain models.
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1. Introduction
The demand for “vintage” guitars emerged in the 1960s and continues to this day. Since
then, manufacturers have tried to faithfully replicate specific, sought after years of certain
models. The following are three of the most popular models: Gibson Les Paul, Fender
Stratocaster, and Fender Telecaster. Fred Green, president of C.F. Martin Guitars claims that “in
a blind test, only a tiny percentage of players could tell the difference” while comparing the
sound fidelity of vintage and new guitars (Music Trades 2011). Though many other experts
agree, people are still forking over thousands of dollars more for a vintage year of the same make
and model guitar. A new Fender 1956 “Reissued Vintage Stratocaster” can be widely found with
a pricetag of $1,700, while an original 1956 Stratocaster has been seen to sell for $17,000 (Music
Trades 2011). Gibson, produces a replica of their famous 1959 Les Paul they claim is an
“obsessively accurate reissue” of the original, available at $8,599 on the company’s website
(gibson.com). This is over twenty times less than the $175,000 spent on an original in 2011
(Music Trades 2011).
Before we go any further it is important to establish the difference between “vintage” and
“old” with respect to my analysis. Consider vintage guitars as specific models produced between
1950 ­ 1980 that are valued by vintage guitar buyers as collectables. Old guitars are simply
guitars produced during the same time period that hold no current monetary value for a variety of
different reasons. The three specific models discussed in this paper are arguably the most popular
guitars that fall into the “vintage” category based on their high demand in today’s market and the
fact that they are all still in present production. With that being said, they certainly are not the
only ones.
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2. Background
The argument of whether or not these vintage instruments sound better than new ones
may never be resolved among luthiers and guitar experts around the globe. Respected names in
the industry provide convincing cases for both sides of the spectrum. George Gruhn, owner of
Gruhn Guitars in Nashville, has arguably handled more vintage guitars than anyone else on the
planet. He claims “older instruments are intrinsically superior” (Gruhn 2010). He goes on to
describe a “golden era” of production when manufacturers had access to wood that does not
compare to the quality of today’s lumber. Richard McDonald, the current Fender executive VP,
agrees with Gruhn, saying “Old growth, ten­foot­diameter spruce and mahogany logs are just not
as easy to come by as they were 40 to 60 years ago” (Music Trades 2015). He still argues that
there is no way to accurately describe a “golden era.” “Some are special, some are not. There is
an emotional vibe when you play an old guitar with a lot of history. But objectively, some are
just not that great.” Sam Ash, founder of Sam Ash Music, says “Computer production methods
make for more consistent guitars” claiming that his “new guitars are better than vintage
instruments” (Music Trades 2011). When asked about a “golden era,” Ash claims you will find
“slight imperfections” due to production. This leads most to the conclusion that the demand for
vintage guitars simply stems from their scarcity and intrinsic value, not their sound. Either way,
the argument remains subjective and may never be completely resolved.
George Gruhn puts the vintage guitar buyer into three categories: musicians, collectors,
and speculators (Music Trades 2011). Musicians view their purchase as an actual asset to their
work and typically tend to be on a limited budget. Collector’s purchase guitars based on their
love for a specific year or passion for a particular model. Gruhn also finds similarities between
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the vintage car and guitar market, claiming collectors tend to be interested in the same guitars
they idolized when they were 16 ( Music Trades 2011). Most collectors are baby boomers, which
means they would tend to favor guitars from the 50s and 60s. Speculators view guitars strictly as
investments, hoping to buy and sell the instrument as quickly as possible. With that being said,
the price of each guitar could vary based on who was selling and buying in each transaction. A
musician looking for a quick buck may have been willing to part with an instrument for less than
it was worth. On the contrary, a collector may willingly have overpaid for an instrument, money
not being an issue, due to a potential obsession with a specific guitar.
Regardless of whether or not you buy into the “they just don’t make ‘em like they used
to” idea, the demand for vintage guitars is real. What is not disputed is that the current prices of
these coveted instruments put them in an entirely separate price range that dramatically exceeds
the price range of modern day new ones. Yet within this vintage price range there still is a high
variance of prices. Which leads to the real question, that could more objectively be answered:
What characteristics about these vintage guitars, specifically the three models of my study,
produced between 1950 ­ 1980 significantly impact their price in today’s market?
3. Data
My decision to focus on the three models I chose was based on their overall popularity
amongst the public. Which ultimately meant I could find the most amount of data. Due to a
limited number of transactions among specific vintage acoustic models, I restricted my focus to
electric models. With that being said, the demand for acoustics is similar to that of electrics,
though the analysis of acoustics could be an entirely different one by itself. One significant
difference between the two is the materials used in production. The aged wood discussed earlier
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tends to have a more significant impact on the sound of acoustics which enforces the argument of
older ones sounding better.
The first step of my analysis required acquiring data on recent vintage guitar transactions
in the last five years. The established twenty five year period (1950­1975) was decided based on
the popularity of the three models. I turned to reverb.com, an online marketplace focusing
strictly on music, for my data. All 335 transactions analysed were pulled from their archives.
After gathering info on each of these transactions, the next step was to quantify each variable in
order to accurately run it through a regression. I established ten independent variables to
consider: Age, Pre­1965, Condition, Refurb, Condition*Refurb, Les Paul Standard, Stratocaster,
Telecaster Reissue, and Finish. The age of the guitar which can be found by subtracting the
current year (2016) from the year the guitar was produced. The “Pre­1965” dummy variable
simply indicates whether or not the guitar was produced before or after that year. This stems
from the “golden era” theory of Gibson and Fender guitars being valued higher when produced
between 1950­1965. Reverb rates their guitars on a 0­8 scale, 0 being non functioning and 8
being brand new, creating the condition variable. The “Refurb” dummy variable refers to
whether or not a guitar has been dramatically restored (new finish, new neck, tuner replacements,
pickup replacement) from its original state. "Condition*Refurb” is an interactive variable
between condition and refurbished. One hypothesis is that condition matters in all cases, but
matters more for an untouched guitar. The next three variables are dummy variables identifying
the make and model of each guitar (Les Paul, Stratocaster, Telecaster). While I believe each
model has vintage value, I do not think the three guitars are perfect substitutes of each other. I
think that whether or not the guitar’s finish was “stock” or “special” to that year could affect the
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present day price, which hopefully will be explained by the “Finish” dummy. The “Reissue”
dummy tests the hypothesis that guitars which have have a modern day replica or “reissue” are
worth more than ones that do not.
Hypothesis #1: ​The age of a guitar affects the current price, but there is a premium on
“golden era” guitars.
Hypothesis #2: ​Better condition of a guitar will increase auction price, but will do so by
a smaller amount for refurbished guitars.
Secondary Hypothesis #3a:​ Modern­day reissues of old years drives up the current price
of the original model.
Secondary Hypothesis #3b​: Specialty finishes on vintage guitars increases their present
day price.
4. Results
Figure 1 shows a summary of all the data collected. Table 1 shows the regression results
of three separate models. Model 1 is simple linear regression between the age and price
variables. Models 2 & 3 are multiple regressions, all variables considered (excluding interactive
“Condition*Refurb” variable in Model 2). Model 1 shows a positive and significant coefficient
on the age of a guitar. For each additional year of age, not controlling for other factors, the price
of a guitar goes up by an average of $904.71. Model 2 controls for all of the predefined variables
(excluding interactive) and can more accurately explain 55% of the variation of the current price
of a vintage guitar. As you can see, the age variable is still significant, but the magnitude of the
“age” effect is reduced. An additional year of age increases the price by $489.43 in Model 2.
The “Pre­1965” dummy variable is also shown to be extremely significant (Model 2). A guitar
produced before 1965 sells for an average of $5,456.94 more than one produced after that date.
This partially explains one initial hypothesis that age matters, but not as much as the “era” of
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production. It also confirms the “golden age” theory that guitars produced between 1950 ­1965
are valued higher than ones produced after (Gruhn and Carter, 1999). Further research helps to
back my statistical findings. In 1965, Fender was sold to CBS, which led to major changes to
production. This ultimately led to a decline in quality that lasted all throughout the seventies.
Model 3 focuses on the interaction of condition, introducing the “Condition*Refurb”
interactive variable. According to Model 3, each additional increase on the 0­8 scale will raise
the price of a guitar by $1,146.11. My initial hypothesis is that the coefficient on the
“Condition*Refurb” interactive variable would be negative, indicating that condition matters less
for refurbished guitars. As such, my hypothesis of a particular direction for this coefficient
implies a one­tailed test is appropriate. The interactive variable in Model 3 suggests that if a
guitar is refurbished, each additional condition point lowers the value of refurbished guitars by
$1146­$1240= ­ $94. (ᵯ​2​ + ᵯ​4​)
Figure 2 illustrates the findings of Model 3 by comparing condition vs. price between
non­refurbished and refurbished guitars, controlling for all variables. The Refurbished Guitar
line (​Y​1​) and Non­Refurbished Guitar line (​Y​2​) uses the following formulas, where I assume 50
to be the mean age of all the guitars in my data set. (ᵯ​1​, ᵯ​2​, ᵯ​3​, and ᵯ​4​ are equal to the coefficients
of the age, condition, refurb, and interactive variables, respectively)
Y​1​ = α + ​50​ᵯ​1​ + (ᵯ​2​ + ᵯ​4​)ᵌ​2​ + ᵯ​3
Y​2​ = α + ​50​ᵯ​1​ + ᵯ​2​*ᵌ​2
The results shown in Figure 2 lead me to accept one initial hypothesis, while failing to
accept another. For a non­refurbished guitar, each additional point increase in condition (ᵌ​2​)
raises the price of a guitar (​Y​2​) by an average of $1,146.10 (ᵯ​2​). For a refurbished model, ᵯ​2​ is
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­$94.33, meaning that an increase in condition would slightly lower the price (​Y​1​) of a guitar.
These findings fail to accept the null hypothesis that condition affects the present day price in all
cases. Condition is shown to have a significant impact on the price of non­refurbished guitars,
while having no effect on the price of refurbished models. Figure 2 does however allow me to
accept my prediction that a non­refurbished guitar is worth more than one that has been fully
restored.
The dummy Les Paul and Stratocaster variables are shown to not be statistically
significant in Models 2 & 3, which means that controlling for all variables, the model alone has
no clear impact on price. The Telecaster dummy was omitted from regressions to serve as a
comparison baseline, reflecting the change in auction price of a Les Paul and Stratocaster relative
to a Telecaster. This could be misleading though given the fact that Gibson did not produce Les
Pauls between 1960­1972. (ie, limited Pre­1965 Les Pauls) Finally, the last two variables
confirm my secondary hypothesis that the finish and reissue of a guitar have a significant impact
on the price. A guitar with a special or unique finish to its year of production can raise the price
by an average of $3,419.90. Additionally, a model that has a modern day reissue or replica,
raises its price by an average of $5,049.23.
Several uncontrollable factors could have impacted my results in a negative fashion.
Studies show that incomplete info provided on online postings, picture quality, and buyer/seller
feedback can all impact the price of guitars online (Eaton, 2005). Zhao, K., Zhao, X., and Deng,
J. (2015) address the “winner’s curse” phenomenon, claiming that experienced sellers provide
more details, which promotes efficient trade and buyers not overpaying. Sound quality is also
impossible to test when purchasing a guitar on the internet. The advertised condition is also
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subjective to the seller. Every condition rating recorded on my data was determined by each
individual seller. Gruhn (2010) is confident that condition and year are the two largest factors in
determining the price of a vintage guitar. He also admits that almost no electric guitar is truly
original based on the lifespan of wires and components. This could mean that my “refurb”
variable may not have accurately reflected the fidelity of the instruments original state given the
fact that it only controlled for major restorations. An owner may have replaced one pickup or
small paint chip, leaving the rest untouched, lowering its value, yet still selling it as
“non­refurbished.” Unfortunately this information was unable to be captured for each transaction
in my sample. All these factors could contribute to the 44% of variance in price that can not be
explained by my established independent variables.
A few outliers were thrown out in hopes to make my data more accurate. Two 1960 Les
Pauls were found to sell for $145,000 and $240,000 respectively, clearly signifying a coveted
year by collectors, as well as several late 1960s Stratocasters played by Jimi Hendrix, Clapton,
and Bob Dylan that all sold in upper six figures. Those transactions could have biased the
estimation for several of my variables. (What the outliers do support, however, is an initial
hypothesis that year of production matters in addition to the actual age.)
5. Conclusion
This paper set out to identify the significant characteristics affecting the current prices of
vintage electric guitars produced between 1950 ­ 1975. The models examined, Gibson Les Paul,
Fender Stratocaster, and Fender Telecaster, produced within this time period all hold unique
value to musicians, collectors, and investors. I hypothesized that the year or “era” of production
is more significant to the price of a guitar than its overall age. This is supported by the “golden
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age” theory defined by George Gruhn and other experts across the industry (Music Trades 2011).
I also hypothesized that the condition of a guitar is significant in all cases, but whether or not the
instrument has been fully restored matters more to the present day price. Furthermore, I
suggested that specialty finishes and modern­day reissues increases the price of a vintage guitar.
My first result, based on a multiple regression analysis, is that guitars produced before
1965 tend to sell for an average of $5,456.94 more than ones produced prior, confirming my first
hypothesis. My second hypothesis could not be entirely confirmed with the data I collected. The
condition of a guitar can not be statistically shown to have a significant impact on prices in all
cases, as displayed in Figure 2. However, a fully restored guitar is valued less than one in its
original condition. Uncontrollable factors unaccounted for, such as online signaling (Eaton,
2005), could play a role in the ambiguity of my results. Explaining why only 56% of the variance
in prices could be explained by my quantified independent variables.
A specialty finish on a guitar does show to increase the current price. If a vintage model
has a modern day replica reissue, the original value is also seen to increase. Both of those
findings confirm a secondary hypothesis and past research done (Fraley 2009).
My data suggests that we can statistically explain only part of the prices of vintage
electric guitars. Yet similar to a nation’s economy or any other vintage market, only time can tell
which factors will play the largest role in future prices. A specific era or year of guitars not
covetted now may suddenly gain value in later years, not to mention the future prices of today’s
guitars in 50 years.
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REFERENCES
Eaton, D. H. (2005). Valuing Information: Evidence from Guitar Auctions on eBay. ​Journal Of
Applied Economics & Policy​, ​24​(1), 1­19.
Fraley, C. (2009, January 1).​ An econometric estimate of hedonic price functions: the case of
vintage electric guitars. ​Ann Arbor, MI: University Microfilms International (UMI).
Gruhn, George. (April 2010). The vintage instrument market. ​Gruhn’s Guitars, 33. ​Retreived
from http://guitars.com/newsletter/vintage­instrument­market.
Gruhn, G., & Carter, W. (1999). ​Gruhn's guide to vintage guitars : an identification guide for
american fretted instruments​. [N.p.]: Miller Freeman Books.
Team, G. (2015, November 4). The 60 most valuable guitars ever sold at auction. Retrieved
April 14, 2016, from http://www.gizmag.com/most­valuable­guitars­ever­sold/38147/
Vintage Guitar Market Maker. (2011). ​Music Trades​, ​159​(1), 172­180.
Why Do Vintage Guitars Command Such A Premium? (2015). ​Music Trades​, ​163​(9), 68­74.
Zhao, K., Zhao, X., & Deng, J. (2015). Online Price Dispersion Revisited: How Do Transaction
Prices Differ from Listing Prices? ​Journal Of Management Information Systems​, 32(1),
261­290.
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Table 1 ​Characteristics affecting prices of vintage guitars
(dep variable = Price of vintage guitar at transaction), (standard errors in parenthesis)
Variable Model 1 Model 2 Model 3
Intercept ­35927.76 (3534.31)*** ­20427.92 (4841.91)*** ­21380.79 (4881.47)***
Age (2016 ­ Prod. Year) 904.71 (66.98)*** 489.43 (99.37)*** 484.41 (99.72)***
Pre­1965 (0,1) ­­­ 5279.95 (1208.92)*** 5456.94 (1213.58)***
Condition (0­8 scale) ­­­ 746.37 (410.78)* 1146.11 (498.44)^^^
Refurb (0,1) ­­­ ­7759.15 (890.91)*** ­2956.75 (3516.81)
Condition*Refurb ­­­ ­­­ ­1240.43 (878.84)^
Stratocaster (0,1) ­­­ 253.68 (866.04) 242.22 (864.77)
Les Paul (0,1) ­­­ ­1682.77 (1172.45) ­1532.70 (1175.49)
Finish (0,1) ­­­ 3453.42 (1179.52)*** 3419.90 (1177.96)***
Reissue (0,1) ­­­ 5106.28 (984.34)*** 5049.23 (983.68)***
R­squared 0.354 0.545 0.548
*,**,*** indicate significance at the .10, .05, and .01 levels,
respectively, for 2­tailed test. ^,^^,^^^ indicate significance at the .10, .05, and .01 levels, respectively, for
1­tailed test.
Figure 1
Figure 2
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