Tech Stock Valuation

III. ESTIMATING 17TH CENTURY TULIP PRICES

Happily, a present-day equivalent of 17th century Dutch tulip prices can be esti-

mated because Mackay gives an example of a typical price paid for a single bulb

of a species called the Viceroy, where the price paid is measured both in terms of

florins and in terms of real goods received in trade. This example, shown in

Table 4.1, provides an opportunity to calculate a present-day equivalent price of

the amount paid. Keep in mind throughout this example that one single tulip bulb

was received in trade for all items listed in Table 4.1.

The first item received in trade is two lasts of wheat. A last is a unit of ...