TruthScape.com  9  TruthScape Weighted Index of RuneScape Prices (TWIRP)       9  Understanding TWIRP

About the TWIRP Weekly Reports TWIRP Index Details

I have a lot of time and effort invested in TWIRP, because I think it's a system that can be of great value to all RuneScape players who are interested in the state of the game's economy, and item trade among players. At the same time, I think it's important for anyone who uses the TWIRP indexes to remember the limitations of what I am doing here. This means understanding the nature of what the indexes report, and the weaknesses inherent in the methods used and data underlying them.

I will start off by reminding you, once again, that indexes only show relative price trends. The specific numbers do not have any meaning on their own; they do not say anything absolute about the skill, whether it is worth doing or makes money or so forth. For example, if the current Hunter Income index is 112.4, that means only that the value of the items produced by the Hunter skill has gone up by 12.4% since December 31, 2007—it doesn't necessarily mean that Hunter is a great way of making money, just that it is better now than it was then.

This warning is particularly important in dealing with yield indexes, which show the value of output from a skill or activity relative to input cost. Here, the figure again only shows whether the relative profitability is getting better or worse. The number should not be interpreted as "if it's above 100 you make money with the skill, and if it's below 100 you don't". For example, if the Herblore Yield Index on a particular date is 105.6, That does not necessarily mean that you will now make 5.6% on your money, it just means that it is 5.6% more profitable to train Herblore than it was on 1/1/2008. It could be that you still lose money with the skill, on average, just less than before.

Finally, and in the same vein, please remember that indexes are independent and cannot be compared to each other except in terms of what they say about relative changes over time. If the Herblore Yield Index one day is 105.6 and the Runecrafting Yield Index is 103.8, that does not mean Herblore (necessarily) makes more money than Runecrafting! It just means that Herblore has improved its profitability more than Runecrafting has in that timeframe. In fact, it could be that Runecrafting is more profitable than Herblore even if Herblore has an index of 105.6 and Runecrafting's is 97.2. (That would just mean Runecrafting is now not quite as much better for moneymaking compared to Herblore as it once was.)

This is an old expression in the computer industry; it means simply that no matter how good a program, system or method is, if you give it bad data then the results will also be bad. In this case, the accuracy of TWIRP (or any other RuneScape price index) is entirely dependent on the accuracy of the pricing information fed into it. While the Grand Exchange has enabled the project to be implemented—since before we had no way of determining item prices on a centralized basis—there are still many flaws related to the GE that you should be aware of when interpreting index results.

The main issue has to do with the validity of the prices quoted by the exchange. I use the listed market value price because that's the most reasonable assumption to make, but in reality, just because an item is listed at a particular average price, that doesn't mean it is really trading at that price. Some items may actually be trading near the bottom of the +/-5% price range, and others near the top. There's really no easy way to determine this short of trying to buy or sell every item, which I obviously can't do.

Even worse is the case of items that are not trading at all due to incorrect pricing. The GE is inflexible and many prices are so far off from what players feel are fair value that they don't use it and no items ever change hands. Thus, the quoted price for the item is not a fair reflection of market value, but I can't really be sure of this or do anything about it. Many discontinued items (partyhats, Santa hats and so forth) and big-ticket luxury items (third age sets) fall into this category. All I can do is report the prices as listed, though.

Finally, there are also many items that are trading but at artificially propped up or restricted prices due to floor or ceiling levels imposed by the GE. For example, gold bars cannot drop below 210 gp each because Jagex set that as the minimum price due to it being the high alch price of gold bars. (Who alchs gold bars? Er, never mind.) Many other items are in the same situation: many types of jewelry, iron knives, certain runes, arrows and more. If and when these policies are fixed, many of those items will see very strong moves.

You should always keep in mind that any indexing system is only an approximation based on a representative sampling of prices. There are many more items that are traded than I can track within TWIRP, and in some cases they may experience major price moves that affect the economy in ways I cannot measure until I adjust my system.

I also mentioned earlier that the weightings used to prioritize items are "guesstimates" based on research and my understanding of the game and its economy. I have tried to be conservative with these figures but cannot guarantee that they will always be entirely accurate.

Finally, please bear in mind that indexes are averages and will, of necessity, not represent the results experienced by everyone. Just as an individual investor can make a fortune in the stock market even as the Dow Jones Industrial Average is going down, you can do very well in a RuneScape skill even if its index is decreasing. I can assure you that I have consistently made money on most RuneScape skills even as most people lamented that they were "too expensive to train". Just use the indexes as guidelines, and continue to find smart ways of doing things.

And of course, the opposite holds true as well: an index increasing doesn't necessarily mean it's time to jump on the bandwagon. So don't take the indexes as "gospel".

Always remember that indexes show what has happened in the past, which is not necessarily indicative of what will occur in the future. For example, TWIRP may show that the yield from Herblore has been improving continuously for six straight weeks, but it could decide to go down for the following six weeks just as easily.

About the TWIRP Weekly Reports TWIRP Index Details