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Wednesday, September 9, 2009

General Commentary - Demographics and the Stamp Market

For anyone interested in investing in stamps, a demographic overview is crucial. Unfortunately, as far as stamp collecting in particular is concerned, hard demographic data are practically non-existent.

The problem is partly a matter of definition. In attempting to find out how many stamp collectors there are in the world or in a particular country, one must first ask: what is meant by the term "stamp collector?" The population of individuals who have saved at least a single stamp will be much higher than that of "serious" collectors - those who spend a significant amount of time and money on their hobby. Defining serious collectors using the amount of money that the individual spends on the hobby is also problematic, both because economic conditions vary from country to country, and because it is possible to be a serious stamp collector without spending very much money. Estimates of the total number of U.S. stamp collectors have ranged as high as 20 million, but based upon the number of collectors subscribing to major philatelic periodicals, membership in philatelic societies, and attendance at major philatelic exhibitions, a more realistic estimate of the number of "serious" U.S. stamp collectors would probably range from 150,000 - 300,000.

Worldwide, the figure of 50 million is a much-quoted estimate of the total number of stamp collectors. Again, there is the problem of definition - does the estimate include all stamp collectors, including those who are "less serious?" Would a broad definition of "stamp collector" increase the estimate to the hundreds of millions? And how many "serious" stamp collectors are there within this group?

For a philatelic investor considering investing in the stamps of a particular country, estimating the number of serious collectors of that country's stamps, and whether the collector population is growing, is extremely important, but also extremely difficult. One useful gauge, which may be derived from information which is available, is projecting a country's economic growth and whether the benefits of that growth are being spread around, or whether they are enriching only a tiny elite- in other words, does a particular country have a growing middle class? Even answering that question is insufficient, however, because less measurable cultural factors exist which determine what proportion of the population that can afford a hobby will collect stamps. Some nations, such as Germany, are more culturally attuned to philately than others. Another complication is that often, many collectors of a particular country's stamps are not citizens of that country.

Ultimately, the best solution for the philatelic investor focusing upon a particular country is to attempt to project the growth of its middle class, and then to make a very open-ended educated guess concerning the future of its stamp collecting population.

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