Diminishing Returns?

[Carl Reid]

There is a bit of a concept problem here. Ya cant judge a 7K CDP and a 1K CDP BOTH on lets say a Apogee C-Minor (smallest hybrid) cause its not good enough to show up the performance of the 7K player.

One player that is at least 7 times better then a 1K player (the ones i know) is a Goldmund CD36

I'll agree with that... it's a good point...

I doubt I'd hear any difference hooking up a $5K Classe CD player to a $200 Sony CD Receiver versus a $300 Marantz CD Player with the same Sony Receiver.... The Sony just wouldn't be good enough to show the difference...

[Carl Reid]

It sure isn't worth getting this upset over. It's interesting to hear what everyone has to say based on their experience with various equipment. You guys are getting a little serious about a fun discussion.

Not sure if you're talking about me.... but I haven't got the impression that anyone is really getting upset over the discussion (at least I know I'm not)... but I think it's a fun debate... and I really like hearing different oppinions on both where diminishing returns kicks in and whether or not the concept even makes sense when we apply it to consumer goods...

[Florian]

Oh yeah, and i forgot to add.

You guys really think i paid anywhere close to 50K for that speaker? LOL.... I am not rich, i dont even know how to pay my next rent. I got fired from my last job cause they hired to russians who work for less. The "trick" to get super speakers at a low low price is to understand the people who bought them.

All Apogee Grands where bought by millionares. The guy in Jerusalem bought two pair at the same time. Thats 170K in 93' ;-)

Rich people abuse these, mine where used as a party speaker. They drove the **** out of it! The front was scratched (had to redo that), 3 of the internal amps where overheated. (Mind you those drop over 3200 watts!!!!!). Those are getting fixed right now. So they had a problem with it and noone could repair it, so they dumped the speaker in a Garage along its huge wooden crates. Well i found it and bought it for around 9K.

I traced down the design who built this thing and i got the schematics and all the building plans. Now i am restoring it. The electronics will be done in Febuary and for the mean time i designed a passive crossover until the whole thing is done.

Rich people i know are lazy, they dont give a crap about a 100k plus speaker system. They buy it to show off to their friends and when its down they sell them to some looser, not expecting they can fix it. So i drove throgh Austria and Switzerland into Italy and we moved 1.4 Tons of speaker out and i am waiting for half a year to enjoy them fully. Is it worth it to me? Yes!





Flos HIFI tricks..... my journey

Buy Maggie 0.5 and a Computer

traded the computer in for Maggie 1.6's

traded in the 1.6's plus 2K for Maggie 3.6

traded in Maggie 3.6 for Apogee Scintilla

traded Scintilla in for Apogee DIVA

sold DIVA for 12K and bought Grands :-) :-) :-)

[emorphien]

Not sure if you're talking about me.... but I haven't got the impression that anyone is really getting upset over the discussion (at least I know I'm not)... but I think it's a fun debate... and I really like hearing different oppinions on both where diminishing returns kicks in and whether or not the concept even makes sense when we apply it to consumer goods...

I don't remember who it was anymore and it doesn't matter. Whoever was nitpicking over the idea and felt the need to start arguing that. No fun, keep the thread fun!

[hermanv]

Without some frame of reference, this thread is meaningless. A $65 portable CD player and $50 worth of headphones will get you sound you could barely touch in 1960 for any amount of money. I've heard some of that stuff, in terms of resolution, bandwidth, detail and lack of noise, it didn't get there.

Do I have a $65 CD player and $50 headphones, actually yes. Do I listen to music with them, almost never.

Diminishing returns has much more to do with how much of your "disposable" income you allocate in exchange for the enjoyment you get from good sound. I know people who can afford the very best equipment and have absolutely zero interest in better sound. I also know those who have problems spending $100 who dream regularly of better equipment.

Diminishing returns are determined by your wallet not your ears. That $75 complete system from Wallmart will in fact produce recognizable music. Assuming a knowledgable consumer, as you spend more, it gets better . There is no “knee” at which there is a sudden decrease in return on investment. Yes, you get less and less as you spend more and more, but you still get incrementally better sound.

Many simply don’t care, when people I’ve known hear a truly good system, most remark, “Wow, I had no idea what I was missing”. Yet they don’t rush out and buy a high end system or improve their home system in any way.

[emorphien]

If ya don't like it, don't post. Sheesh.

[Mr Peabody]

Slump and herman hit on some good points as far as motivation and decision making. It's a lot to do with priorities, means and what satisfies us. I need therapy, I probably have a lower income than most of you here yet I am willing to work it out to where I can have a better than mid fi system. If that means buyin used or on credit, so b it. I listen to music morethan I watch TV and I thoroughly enjoy my hi fi gear. But this is my only hobby, some of you may need funs for Golf or whatever. I am at a place now where I can honestly say I am satisfied with my system. If I had more money, I might be tempted to upgrade somewhere but part of me don't want to take a chance on spoilig what I have now. I''m sure a better DAC or preamp wouldn't hurt anythig. I have reache the limits of my means for now, thankfully, that and being satisfied came close to the same time.

You may think the reason I'm satisfied is because I've reached the end of my means but that's not true. I have some credit line if I really really wanted to upgrade. Before I was restless always checking on line for good deals or something better. With my current system in place I don't have the desire anymore to do that. Krell is good stuff and certainly provided a "wow factor" but for some reason I was not content. With my current Conrad Johnson gear, I am perfectly content to sit and listen as long as I can. It's like I am fully aware that there is better equipment but it no longer matters. Is that what you are talking about Carl? Maybe our tastes are satisfied by differen levels of gear or maybe we all have found the gear that just does it for us. Or, maybe it's varying degrees of passion, or addiction.

Now that I have heard high end gear and at least have enough means to put my hands on some, I would not be satisfied with Rotel or Adcom for a main system. There's nothing wrong with them but to me what I have now, the expense is well worth the difference in listening enjoyment I receive. Apparently, most of you don't feel that way, for whatever reason..

[hermanv]

..edit... I listen to music morethan I watch TV and I thoroughly enjoy my hi fi gear. But this is my only hobby, ...I am at a place now where I can honestly say I am satisfied with my system. If I had more money, I might be tempted to upgrade somewhere but part of me don't want to take a chance on spoilig what I have now.

Before I was restless always checking on line for good deals or something better. With my current system in place I don't have the desire anymore to do that. Krell is good stuff and certainly provided a "wow factor" but for some reason I was not content. With my current Conrad Johnson gear, I am perfectly content to sit and listen as long as I can. It's like I am fully aware that there is better equipment but it no longer matters. Is that what you are talking about Carl? Maybe our tastes are satisfied by differen levels of gear or maybe we all have found the gear that just does it for us. Or, maybe it's varying degrees of passion, or addiction.

Now that I have heard high end gear and at least have enough means to put my hands on some, I would not be satisfied with Rotel or Adcom for a main system. There's nothing wrong with them but to me what I have now, the expense is well worth the difference in listening enjoyment I receive. Apparently, most of you don't feel that way, for whatever reason..

IMHO you initially spend money in this hobby to minimize the negatives, glare, etch, boomy bass, etc. Getting rid of that stuff gets rid of fatigue. Suddenly you can listen and enjoy music for hours. Next if you have the financial reserves, you try and maximize the positives. Taut and deep bass, crystal clear midrange and lots of air in that tweeter. These things start to transport you into the music.

There seems to be a kind of trick. That is to maximize resolution and detail without bringing forward that harshness or grain that so colors most electronic reproduction. It's not that easy. A new speaker often reveals a weakness in the power amp, next after fixing that problem you can tell the source doesn't measure up. Now it's back to the pre-amp and notice I haven't even mentioned cables. Each piece has it's own limitations and the problem seems to be that the weakest piece effectively masks the problem of the next weakest piece.

This is how you climb on the upgrade merry go round. Like so many others, I initially couldn't believe what some of this stuff costs. Now both poorer and wiser, I do understand how easy it is to discover that you didn't buy well, that for the same money you could have done better.

It seems to me that as your equipment improves, so does your ability to hear shortcommings. The equipment has to be good enough where you can identify what is and what is not wrong with the sound, what it is that's not satisfying.

On a site I enjoy http://www.10audio.com/ There is a decent definition of a good system. If the sound is good enough, you can't read a book or do other things because the system will distract you to the point where you end up just listening, abandoning your other pursuits.

[Carl Reid]

This thread is NOT about:

1) Bashing forum members who spend a lot of money on their setup.... As far as I'm concerned, if you can afford to drop $50K on your 2 channel setup and you really enjoy it, then there's nothing wrong that! I'm sure most of us even those with a $1K setup have friends and family who think we are total lunatics for spending that much when a simple Aiwa minisystem could "do the job" for $200....

2) What is your current/dream system.... Diminishing Returns (which I readily admit is a flawed concept, but since it's 'Economics' it's all about flawed assumptions anyway) is not a question of how much did you spend or how much are you willing to spend.... it's more a question of at what price do you think you're not getting as much value for your money as you initially got....

3) That everyone on this site is gonna come to a consensus on where diminishing returns sets in.... That's Impossible... we will not even be near an agreement... but the purpose of the thread is just to facilitate an open discussion and share ideas and opinions... There is no right or wrong answer here.... only opinions... so feel free to share them....



@ Florian - even if you had actually spent $50K on speakers, there would be nothing wrong with that if you think it's worth it... We all waste money on all kinds of useless crap anyway.... so why not save it and put it towards something you really like.... I mean... why does someone who has a perfectly good Honda Accord for everyday use, save up their money to buy a Porsche for the weekend?

Oh I think I may have an idea for your Apogee situation.... why don't U keep the Apogees (much like a weekend Porsche) and use them when U need audio nirvana just a few times a month to keep the power bill down.... and buy some more modest less power hungry speakers for everday use... maybe some Maggies....

Oh yeah, one last thing... buying used is very much the way to go.... I'm with you on that... and I'm pretty sure that my next upgrade will likely be used.... since you can easily get high-end gear in good or even excellent condition for half price on the used market... hell... some lucky guys got my old NAD Integrated and CD player for about half the price of new gear.... and those were in excellent condition .... I don't think I'm quite ready for buying and restoring gear yet though.... but maybe one day...



@ Mr. Peabody.... You actually have pretty much the same approach I'm moving towards.... which is that if you have only one expensive hobby, then you can afford to dump more money into it than what seems 'reasonable'.... it's part of why I stick to 2 channel and have not bothered with HT.... for the price of a really crappy HT system, you can easily get a decent two channel setup....

[blackraven]

I'll probably catch alot of flak over this statement but I doubt that most people would be able to tell the difference in the sound of a $1,000-1500 amplifier vs a $10,000 amplifier with the CD player and speakers being equal. (that is assuming the brightness of the amplifiers are the same). I would bet my last dollar that if you did a double blind test you would find that people would pick the higher priced amp only 50% of the time. I bet the same would be true for comparing CD players just because everyone hears things differenty.

When I bought my Mag Q1.6's, I Iistened to them on an NAD reciever and a $10,000 amp with the same $10,000 CDP and could not tell the difference in sound. My wife and other people in the store could not tell the difference either. I beleive that once you reach a certain point in quality that the benefits of going up in price gives very little in return except for very demanding speakers which may have certain power requirements. I think that most (not all) benefits of high end equipment (excluding speakers because they are so subjective) can be measured with electronic equipment but doubt the human ear can tell the difference.

[Florian]

When I bought my Mag Q1.6's, Iistened to them on an NAD reciever and a $10,000 amp with the same $10,000 CDP and could not tell the difference in sound. My wife and other people in the store could not tell the difference either. I beleive that once you reach a certain point in quality that the benefits of going up in price gives very little in return except for very demanding speakers.

Now dont be offended but i believe that in a second too. Try the same on a Maggie 3.6 and higher and its easy. I am willing to put my money where my mouth is and offer this treat for anyone who wants to visit me. Bring any CDP, AMP or DAC to my place and try it on the Grand. But no wimpy amps please ;-)

[jrhymeammo]

Oh yeah, one last thing... buying used is very much the way to go.... I'm with you on that... and I'm pretty sure that my next upgrade will likely be used.... since you can easily get high-end gear in good or even excellent condition for half price on the used market... hell... some lucky guys got my old NAD Integrated and CD player for about half the price of new gear.... and those were in excellent condition .... I don't think I'm quite ready for buying and restoring gear yet though.... but maybe one day...

It's crazy to buy quality gears new in this hobby unless you cannot find it used. Regardless of the cost, we buy everything because we believe they are worth the cost. I dont think I'll ever spend $5000 on a Patho, but at around $2000 I'll start thinking....

[basite]

Well i found it and bought it for around 9K.

that has to be THE best price/performance rate ever!!!


anyways, (note that this only goes for "If i had the money")it depends on what i'm buying. i can see myself spending 1000-1500 on a tt but i don't see myself spending that on a cd player, those prices would stop about $500-$600, and for carts, the denon dl-103 i have now was a bargain, and it was definately worth it, but i don't see myselfs spending over 1k on a cartridge, the same goes for cables, cheap standard cables have to be replaced, i refuse to use cheap cable in my system, but i don't see the point in having $750 cables, my dad has $150 MIT cables, and they do their job just fine. maybe a little more can be spend on cables, but certainly not $500.

then, amps and preamps, these things may have higher price tags, but at $3000 i think i'll stop, exept when they are really really really nice, like a Mcintosh or so, those could be an exeption,

speakers on the other hand, if i had 20k to spend, at least $12k would go to speakers, but that doesn't take away that there is still alot to dream about.

do take note that when i have that money, i wouldn't spend it on "top of the line" pioneer speakers (yes, they have 8k speakers, i heard them, and they suck.) or the most expensive denon surround receiver/amp, i'd rather spend that money on a "entry level" Mcintosh...

that said, i think i am dreaming at this moment...

Greetings
Bert.

[E-Stat]

Do I have a $65 CD player and $50 headphones, actually yes. Do I listen to music with them, almost never.

I was thinking along the same lines. I will suggest, however, that by using really good headphones or earbuds, you can get demonstrably better sound using CD Walkmen/Ipods. Increase that budget to say $135 street for a set of Shure E3s, and you get really nice sound. And I do listen to music with my Sony Walkman cum Shure earbuds quite a bit when I travel.

Does my main system deliver two hundred times the enjoyment of the portable system? No, but then again it does things the portable system cannot.

rw

[E-Stat]

It's crazy to buy quality gears new in this hobby unless you cannot find it used.

You have a good point. I have purchased many a used component - as long as it was a well made unit with a strong manufacturer behind it. I saved about $10k buying fresh-from-the-factory refurbished speakers. The only real difference was that the steel frames were a bit scuffed.

rw

[hermanv]

Going back and reading my posts, I see that I didn't make myself very clear. The original questions implies there's some sudden point at which the amount of improvement decreases a lot per dollar spent.

I don't really think this is true. I do think the curves of cost vs improvement converge. That is, I agree you get less improvement per dollar as more dollars are spent. I just have a really hard time with the idea that at some fixed amount (say $2,500) you've made the best possible cost benefit decision. I believe this point is different for each and everyone of us, it's related to how much we can afford versus how much we care. Some people care a lot and spend a disproportionate amount of their income this way, other care little and are quite delighted with a mass market system.

So I am leary of advice that says you should spend X, because more is inefficient and less won't do the job.

Once you get past the sticker shock, I agree strongly that used makes a great deal of sense. We might easily disagree on the sonic qualities of many expensive brands, but most of the high priced stuff is solid, well made, with quality parts, it will last a long time.

[Carl Reid]

Going back and reading my posts, I see that I didn't make myself very clear. The original questions implies there's some sudden point at which the amount of improvement decreases a lot per dollar spent.

I don't really think this is true. I do think the curves of cost vs improvement converge. That is, I agree you get less improvement per dollar as more dollars are spent. I just have a really hard time with the idea that at some fixed amount (say $2,500) you've made the best possible cost benefit decision. I believe this point is different for each and everyone of us, it's related to how much we can afford versus how much we care. Some people care a lot and spend a disproportionate amount of their income this way, other care little and are quite delighted with a mass market system.

So I am leary of advice that says you should spend X, because more is inefficient and less won't do the job.

Once you get past the sticker shock, I agree strongly that used makes a great deal of sense. We might easily disagree on the sonic qualities of many expensive brands, but most of the high priced stuff is solid, well made, with quality parts, it will last a long time.

Hmmmm.... so if I'm understanding you correctly.... you don't believe that at some price point... say $2500, that increase in price versus increase in quality suddenly changes from say a 1:1 ratio to maybe a 3:1 (with price being the former and quality being the latter).... but you think that there is gradual (maybe consistent) decline in the Price/Quality ratio....

so initially with say a $100 system you have a 1:1 but by a $2000 system maybe you have only a 1:0.8 etc.....

If that is what you are saying, then that sounds likes an interesting conclusion.....and actually seems quite feasible..... so in that case diminishing returns doesn't occur at a specific price point along a graph but is a constant convergence (or maybe divergence) of increase in Price versus increase in sound quality....

[hermanv]

That conforms to my admittedly limited observations.

It's of course impossible to speak in absolutes. I certainly haven't heard all brands, maybe not even most. So this is opinion based on my personal experiences.

At lower prices, speakers should dominate the expense bias.

As you pass around $5,000 for speakers, the sonic characteristics of each brand of exotic amp starts to become distiguisable. Different amplifier characters show up.

Much past those amounts, suddenly every last part affects the end result. Synergy becomes very important, so lots of time is needed and a few wrong purchases are almost gauranteed.

[Dusty Chalk]

I understand your question, I'm just having a hard time putting together a system. Here's what I have so far:

Source == NEC CD-ROM < US$50 (I forget the model number and exact price, but it was a very popular "flavour of the month" a year or two back)
Speakers == Insignia NS-B2111 (oh, look, they're on sale again) < US$50
Amp...? I don't want to flout the Sonic T, because I haven't heard it in this setup yet, although I have heard it with others and it is quite good.

Yeah, the law of diminishing returns kicks in early at Chez Chalk (pronounced in French-ish, "shawk", only here, due to being pretentious), but then, I don't always believe that that's the point one should strive. I, myself, have another law, the law of "minimal threshold" that needs to be surpassed. Basically what that means is, I have a minimum threshold that I would like to see surpassed, and then I have to budget myself to get there. In retrospect, I wasn't entirely happy with my purchase of the Creek OBH-11 headphone amp, but the OBH-11SE surpassed my minimum threshold and still does -- it is the bare minimum that I can recommend -- if someone is happy with something less good, then I tell them to look elsewhere for recommendations (than to me).

There's also that entire problem of subjectivity in terms of defining "better". I have a friend who's a detail freak, whereas I am a bass-head, and we can rarely reconcile certain equipment (he has a particular pair of headphones that are too bass-light for me, but are excellent in detail). So to him, those headphones are the best in the world, whereas for me they don't even meet my minimum criteria for frequency response (I want them to be at least more or less flattish for most of 20-20k). I don't care how much they cost (and they do cost a lot), they're not good enough for me, based on my weighting of certain characteristics.

So what we all have to do is judge these things based on lowest common denominator -- I feel comfortable recommending the NEC and the Insignias to anyone on a budget (though there will always be exceptions, of course), based on certain criteria that I made up and that I am not stating. For example, when pressed, I will admit that I wouldn't use the Insignias without a sub, myself, because I'm spoiled that way. You really are giving up the last octave on those. But 99% of the time, most people will be so happy with the octaves they are hearing, they won't miss the one or so that they're missing. I also think they don't have a lot of detail -- they're a bit congested, but then I've heard multi US$K speakers, and I know what is possible. For their pricepoint, they're impossible to beat.

[Carl Reid]

I'll probably catch alot of flak over this statement but I doubt that most people would be able to tell the difference in the sound of a $1,000-1500 amplifier vs a $10,000 amplifier with the CD player and speakers being equal. (that is assuming the brightness of the amplifiers are the same). I would bet my last dollar that if you did a double blind test you would find that people would pick the higher priced amp only 50% of the time. I bet the same would be true for comparing CD players just because everyone hears things differenty.

When I bought my Mag Q1.6's, I Iistened to them on an NAD reciever and a $10,000 amp with the same $10,000 CDP and could not tell the difference in sound. My wife and other people in the store could not tell the difference either. I beleive that once you reach a certain point in quality that the benefits of going up in price gives very little in return except for very demanding speakers which may have certain power requirements. I think that most (not all) benefits of high end equipment (excluding speakers because they are so subjective) can be measured with electronic equipment but doubt the human ear can tell the difference.

&

Now dont be offended but i believe that in a second too. Try the same on a Maggie 3.6 and higher and its easy. I am willing to put my money where my mouth is and offer this treat for anyone who wants to visit me. Bring any CDP, AMP or DAC to my place and try it on the Grand. But no wimpy amps please ;-)

I can't believe you two haven't been ripped into yet for that claim... Time to start the pain... lol...

Ok seriously, is it possible that your observations might be due to using Planar speakers rather than traditional cone/box speakers? I don't know if either of you tried that same test with non-planars....

The reason I suspect it might be due to planars is based on a recent review of the Magnepan MG20.1 in Sounstage:

"The MG20.1s are not for would-be reviewers or equipment jockeys. Other speakers, some that cost far less, can tell you more about the other products with which they are used. As transparent as the MG20.1s are through the midrange and especially the treble, they still present music their own particular way, taking over your listening room more than giving you a pristine view into everything upstream and each recording."

So the vibe I get from that review is that the maggies are not paricularly good for comparing different upstream components such as CD players and Amps....

[hermanv]

There is this question about the goal of a music reproduction system. Beethoven's 9th is arguably one of the greatest compositions ever written. While the music is recognizable on a $60 boom box, there is no sense of awe. The sense that this music is reaching across the centuries to stir basic human emotions requires more than that boom box.

For me, the purpose of my system is to allow me to hear artists practicing their craft. It's supposed to be stirring; it's supposed to raise gooseflesh. When everything is working, the eyes tear at the sense of wonder, stunning stuff.

I'm not even much of a classical fan, but I know good work when I hear it. That's why I spend the money, I get very good compensation for the expense.

[Dusty Chalk]

You can achieve the same effect by standing in the frozen food aisle of your local grocer.

[hermanv]

You can achieve the same effect by standing in the frozen food aisle of your local grocer.

True, but my system will do it even when I'm wearing a winter coat.

[Ajani]

Ok I really need to either take some sleeping pills or get a life, but I think I'll start another thread...

So here goes:

We always talk about the law of diminishing returns in relation to our audio hobby.... (and for good reason... since double the price clearly does not mean double the quality when it comes to audio upgrades)...

So I'd love to hear at what price point different people think that diminishing returns really kicks in....

For a strictly 2 channel audio setup with just one source (whether CD, Vinyl, cassete tape, whatever)... at what retail price (sorry, no ebay specials or used equipment) could you build a competent system that would have most of the sonic performance you need?

So basically any worthwhile upgrades would cost a LOT more money at that point...

Note: this setup can be substanially cheaper than what you have now or even more expensive... just base it on set-ups that you've heard, whether at friends, stores, your own setup, etc...

Ok, I'm sure that many of the audiphiles here will laugh at my price, but I think that between $1000 - $2000 (for the entire setup, including cables) is pretty much where diminishing returns set in....

So what's your price range?

I wonder if any of our views have changed in the year since this thread was born. I guess mine have.... I no longer really see diminishing returns as a specific price point for each category of product, but more of a continuous decline in the "more money to increased performance" ratio.

Though I still can't see the reason to spend more than $1k on a CD player - actually I probably wouldn't even spend $300 on a CD player, since I'm a die hard Computer audio fan now... but to each his own....

[nightflier]

I'll second what Basite said: Florian's upgrading technique has got to be the best way any of us common folk can afford truly high-end gear.

And as someone who is probably the poorest of all his friends in this hobby, I also agree with how "rich" people treat their toys. Much of what I've had the chance to hear was either in someone else's home or needed extensive repairs. The trick in the latter scenario is to only purchase products you know you can get repaired. There is an electrical engineer in my company who is an absolute genius with golden ears and is willing to repair stuff for free, but how many of us have a similar situation they can depend on?

On the other hand, I had an opportunity to purchase a pair of Dynaudio C4's some time back, but the cabinets and drivers weren't just trashed they were destroyed - and Dynaudio wasn't going to repair them at a cost that would have been in my price range (now if I can't afford the repairs, I really shouldn't be owning them) but man would I have liked to have them - anyhow, someone else offered more for them and they were gone quickly enough. I consider those one of my big hesitation-related missed opportunities.

Back to the topic, I'm of the opinion that the diminishing returns line is a steady one and does not have a sudden change in slope. I can say however, from what I've listened to in my own home that it takes expensive gear to hear the differences in other expensive gear. A case-in-point I think we can all agree on is with speakers, especially if you consider how dependent they are on the amp driving them. I would almost go so far as saying that the two can't be considered separately. What I mean by that is that what will sound satisfying in a good speaker cannot be evaluated without considering the synergy with its associated amp. This is also true of a cartridge-turntable relationship or a room-speaker relationship. When you consider these things, it is nearly impossible to set a price-point for a sudden increase in diminishing returns on individual gear.

Also, a $300 CDP can be made significantly better with a very good DAC. For example, put an $1000 DAC with a $300 player and you will have a pairing that will rival many (though not all) $2000 standalone players. Likewise a good $1000 phono pre can do wonders for a mechanically sound TT. I'll even go so far as saying that certain tweaks do wonders (especially with phono). Or in the case of speakers, a good stand can substantially improve the sound of a bookshelf speaker, just as spikes have this effect on floor-standers. This isn't a hard & fast rule for every combination, but I think this affects the diminishing returns relationship.

Finally, as someone else mentioned, I concur that there are some components, like a DAC or amp, that can have a very long useful life while others like a CDP or cartridge a very short one. The price people are willing to pay for these items in considering their price improvement ratio would be a very different linear relationship, although I would still maintain that it would be mostly linear.

Anyhow, that has been my experience. I will say that a $1000 or less speaker has substantial compromises, even with $1000 or less components. Speakers are unique in this respect because they are ultimately the point with which we are linked to the system (i.e. through our ears). To be perfectly fair, the same could be said of headphones. With that in mind, I don't think there is a speaker under $2500 that can give me the satisfaction I am looking for in a 2-channel system. I know this sounds snobbish (and I don't mean it to be), but I think this is where I am at on this journey. Only a few years ago I would probably have said that this price point was more like $500.

Oh, and while I see the utility in owning a Honda vs. a Ferrari, I will say that with that example, the relationship is not as linear. This is because you can get 90% of the performance of a Ferrari with a Viper or Saleen (I have driven all three). What you may loose along the way, though, is the oohs and aahs or people who thought they saw what you were sitting in as it flew past their 4-banger that they will struggle to keep on the road from the wake you created. Also a Ferrari-class car is far more visible to a larger number of people (despite how fast it may zip by), than any stationary sound system tucked deep inside the proverbial man-cave (or woman-cave, sorry F.Autumn). Hence people are going to pay far more for the Ferrari than the Saleen, even if the performance doesn't warrant it. Actually, band-for-the-buck, I'd put my money in a Porshe (and, no, I'm not talking about their overpriced re-branded VW Toe-rag).