Not so long ago, Lego proved itself to be a more profitable investment than gold. This was before gold hit $4,000 an ounce (30g) this year. But it was only a mere four years ago that an academic paper found Lego had a higher return on investment than the shiny stuff (before gold quadrupled in value).
The researchers from the Higher School of Economics in Russia argued that “secondary market prices of retired Lego sets grow by 11% annually, which is faster than gold, stocks, and bonds” in the Research in International Business and Finance journal in 2021. Although this is clearly no longer the case, it’s an interesting economic case study. Especially if you’re a Lego-loving geek trying to justify your Lego-spending habit….
The HSE researchers cite a Barclays survey, stating that rich people invest about 10% of their wealth in jewellery, art, antiques, collectable wines, and cars, in addition to traditional investment in financial securities.
“These alternative investments are well-studied, unlike more unusual goods whose purchase might seem less serious: Lego sets, Barbie dolls, superhero minifigures, or model cars and trains,” the researchers wrote.
“We are used to thinking that people buy such items as jewellery, antiques or artworks as an investment,” wrote Victoria Dobrynskaya, HSE associate professor in its Faculty of Economic Sciences. “However, there are other options, such as collectible toys. Tens of thousands of deals are made on the secondary Lego market. Even taking into account the small prices of most sets, this is a huge market that is not well known by traditional investors.”
Unsurprisingly, the priciest sets are Lego’s latest 9,000+ Death Star, Millennium Falcon, and Imperial Star Destroyer. Apart from Star Wars, it’s worth noting that the Taj Mahal, as in life, has maintained its value and beauty.
The HSE academics examined 2,322 Lego sets from 1987 to 2015 and the prices they sold and resold for. Limited editions and rarity – as well as nostalgia – are the main drivers behind the value of the sets. Also, Star Wars.
“Sets produced 20-30 years ago make Lego fans nostalgic, and prices for them go through the roof,” Dobrynskaya wrote. “But despite the high profitability of Lego sets on the secondary market in general, not all sets are equally successful. One must be a real Lego fan to sort out the market nuances and see the investment potential in a particular set.”
