I bought the yarn, Yeoman Panama, at full price from www.cardiknits.com. A quick email to Pat let me know that it's $37.95 (wow, I'm surprised that I spent that much, but it is a great yarn!). Since it's online, there's also the shipping factor, oh, and the cost of the KnitWords magazine subscription. I've gotten a lot of use out of that issue, so let's call that part $4.00 (although, up to $12 would be acceptable for such a complex pattern). Oh, and the 35cents for the buttons. This one took me a year to make as I didn't realize I had bitten off way more than I could knit at the time. I had yarn left over, but not enough to make something on it's own. So, what did it cost to make? How much would I pay for something like it in a store? Well....Despite how much I love what I made, I wouldn't buy something like it!
I just bought some silk/alpaca yarn at $16 US (plus shipping). The Canadian dollar was pretty much at par that day, so it was worth it--but I wouldn't have payed full price--I think it was on sale for 1/2 price. I should be able to get a sweater out of it, using the standard gauge machine.
But to buy worsted weight, good quality wool at full price to make a sweater? No way. I just can't spend $120 to make a Noro sweater, or even $60 to make one with Patons Classic Wool. I did buy bags of Classic Wool at the factory outlet tent sale, but not in my most favourite, first choice colours. Cost vs Love. I would rather make a sweater out of a not-totally-loved colour of Classic Wool then in a colour of Red Heart or Bernat Satin that I do love and that would cost about the same. But that's because I knit primarily because I love the action of making something with time that would otherwise be wasted. The wearable object (or blanket, etc) at the end is the bonus, to me. I love learning new techniques, altering patterns, etc. I'm at the point now where I don't have to choose the cheapest yarn out there just to get my fix. I have learned where to get better yarns at good prices. And this means that when I must buy a yarn like Panama, or the mitten kit, I can really value it and appreciate it and not feel bad about spending the money.
So, if you are a process knitter, then cost perhaps isn't much of a factor. You could knit with twine. But if you are a product knitter, then you'll want to spend more, or at least learn how to spend less. If you knit a lot, you might want to be frugal. If you knit only a few special items a year, then higher costs might not bother you.
Would it be helpful or interesting for me to include more about yarn costs when I post projects?