I'll admit.  I love pianos.  I remember the day that my mom and I went to someone's house to buy a piano she had heard was for sale.  I was 4 or 5, so I don't know if she saw the piano listed in the newspaper or heard about it from a friend, but I know the seller was a stranger.  I remember the man asked if we wanted to try the piano, but neither my mom nor I played.  We just bought it based on its good looks alone.  We lucked out.  It is a good piano.

When I was 27, after six years of living on my own, without a piano, I bought a piano from a warehouse dealer.  I took a long my boyfriend, who has perfect pitch and who became my husband.  He told me to pick what I would describe as the ugliest piano there, with a mismatched bench.  It turns out, it is an excellent piano, a Baldwin from the early 1960s, when the company did not put the name on the outside of the piano.  As a result, I bought the piano at a fraction of its "market value."

But, I've been skeptical of adding this asset to my concept of my "net worth," because I can't imagine that I would find a buyer willing to pay market value for my scratched-up upright piano.  And this article in the NYT today says that I'm probably right.

Markets depart away from efficiency when transaction costs are high.  Pianos have incredibly high transaction costs.  They are difficult to transport and difficult to store.  Yeah, but so are cars, right?  Yes, but cars can transport themselves, don't have to be climate-controlled (besides hail), and don't need a tune-up after being transported.  And, there are warranties.  Online markets don't do well with pianos, which need to be heard, not seen, and often heard by an expert.  So, though I have often wondered why there isn't more piano arbitrage, with dealers scooping up deals from unsuspecting sellers' houses, it may be that the transaction costs of going to people's houses, storing and transporting pianos is too much.

The article also makes the point that fewer people want pianos anymore.  Even though houses are bigger, people seem to like electronic keyboards that don't have to be tuned and can be stored easily.  When one of my neighbors announced they were selling their piano because their son really just wanted a keyboard and they were remodeling the living room, I was appalled.  But, this seems to be the way of the world.  And, I guess my neighbor's son will be able to take his keyboard when he moves out, unlike me.  I'm sure folks with fancy foyers and front rooms still want grand pianos, as long as they are shiny and look good (and maybe with digital "player piano" capabilities), but the middle-class front room piano may go the way of the Encyclopedia Britannica.  In fact, it's so hard to get rid of an old piano these days -- like a set of encyclopedias -- you may even have to pay someone to take it off your hands.

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