So, in my extensive time of Dming in person, a particular question has always managed to vex me at every single corner. The question of "Equipment Value." with respect to NPC wealth, and Wealth by Level for the players.
A single Ring of Protection is valued, by purchasing it, at 2000 gp, but, if sold, is worth only 1000 gp.
My question is simple. When creating an NPC with Wealth, do you equip them with crafted wealth, or purchased wealth?
And does the wealth gained per encounter from the Core Rulebook also relate to Purchased Wealth, or Selling Value?
A Ruby that's 2000 gp sells for 2000 gp. A RoP that's 2000 gp sells for 1000 gp.
Purchased.
The only exception to this is *player made* crafted items - which are supposed to count as the crafted price towards wbl. A Ruby that is 2000gp that sells for 2000gp should take up 2000gp of the NPC's wealth.
If you are making your own encounters - if you watch modules, adventure paths, and other 'commercial grade' encounters - you might notice a theme of using encounters with little to no wealth so they can add interesting or larger treasures to important NPC's/hoards and thus make it a bit more 'TREASURE' than it would be.
You can give every mook a Masterwork Short Sword (vale 310 gp each) - or give them regular short swords and for every 10 of them have a sergeant with a +1 short sword. Ultimately you should try to make sure the players get a mix of stuff they want to sell and stuff they can use *now* - but always a mix. As a final note - consumables should be replaced by extra treasure if they are used (or the players will horde them) and if you give the players a really awesome piece of treasure they keep but only use once every 6 months - don't count it against the character wealth.
That helm of water breathing is a cool item - but it's only useful once in a while.
Until the players sell it, it's valued at full market price towards their wealth by level.
Once it's sold, increase further loot rewards by the difference in value.
Same applies to consumables. Drinking potions shouldn't penalise a player's future wealth.
As a DM you're expected to ensure everyone has appropriate wealth by level. That means if consumables have been used, your job is to make sure an appropriate amount of wealth arrives in the future to keep your players competitive. Short-changing players on their wealth means they won't have the expected gear appropriate for their CR.
While I generally don't use Wealth by Level, my understanding is that it applies to purchase cost.
Whether for generating/equipping PCs or NPCs; or as a guide for their wealth level over the course of play, I've always seen it a purchasing power for them to equip themselves (so, retail costs).
Default campaigns assume a relatively high level of magic/special items, so the wealth levels reflect what it would cost to equip a 'typical' character in such a setting.
For the usual high-fantasy, relatively high-magic campaigns, it's a decent system, and a handy gauge to use.
Bottom line though - you can set it to wherever you want, to suit the sort of campaign you want to run.
But, I would definitely stick with purchase prices.
I'm confident that is the intention; and allowing 1/2 price on high ticket items, would result in extremely well equipped characters.
Fine if you want to run a power-game, but it can be problematic if that's not where you were looking to go.
My own opinion:
Personally, I've always felt wealth levels (D20/3.5/PF) were a bit generous for my tastes.
I'm a pretty long-in-the-tooth GM, and I tend to skew to lower magic levels to keep things from getting out of control. And thousands upon thousands of coins aren't necessary that way either. (who mints all these things anyway?)
In worlds where magic/special items are common, I feel they tend to lose their impact, and become a crutch for characters. And in particularly generous games, the characters themselves are relegated to vehicles that their magic items use to get around an solve challenges.