Staffan said:
This is where you confuse an item having a spell as a prerequisite with an item that uses a spell. The formulas you quote are totally irrelevant to the cost of a belt of dwarvenkind. If it was an item that cast tongues on the wearer, or allowed the wearer to speak any language, they might have some use, but this is not that kind of item.
Yes, but it DOES allow the user to use Darkvision.
This belt gives the wearer a +4 competence bonus on Charisma checks and Charisma-based skill checks as they relate to dealing with dwarves, a +2 competence bonus on similar checks when dealing with gnomes and halflings, and a –2 competence penalty on similar checks when dealing with anyone else. The wearer can understand, speak, and read Dwarven. If the wearer is not a dwarf, he gains 60-foot darkvision, dwarven stonecunning, a +2 enhancement bonus to Constitution, and a +2 resistance bonus on saves against poison, spells, or spell-like effects.
The Belt's abilities are dissimilar: Just because they are abilities a Dwarf might have does not make them similar. They follow a theme, but they are different abilities.
Multiple Different Abilities: Abilities such as an attack roll bonus or saving throw bonus and a spell-like function are not similar, and their values are simply added together to determine the cost. For items that do take up a space on a character’s body each additional power not only has no discount but instead has a 50% increase in price.
Let's calculate:
DarkVision - Use Activated or Continuous (second level Darkvision spell)
Spell level x caster level x 2,000 GP = 12,000 GP
+2 resistance bonus on saves against poison, spells, or spell-like effects ~= +2 to all saves item
Bonus squared x 1,000 gp = 4000 GP * 1.5 * 3 areas (Will, Fort, and Reflex) = 18000 GP
To be generous, let's multiply that cost by 50%, 75% because a Dwarf cannot use the bonus here and 67% because it doesn't cover all saves, just 80+% of them = 9000 GP.
+2 enhancement bonus to Constitution - Equivalent to an Amulet of Health
Bonus squared x 2,000 gp = 4000 GP * 1.5 * 75% (Dwarf cannot use) = 4500 GP
Dwarven Stone cunning - This is an ability which has no real corresponding spell. The closest thing we have to an ability is a feat. And the few feat items are priced fairly highly. But, let’s make it a first level 24 hour spell instead (even though first level 24 hour spells are rare, let's be generous here too).
Spell level x caster level x 2,000 GP = 2000 GP * 1.5 / 2 (24 hour spell) = 1500 GP
Speak Dwarven Language Skill - Unknown since languages do not have ranks, it cannot really be considered a competence bonus. But it is equivalent to a rank (i.e. +1 competence bonus) in a language, so:
Bonus squared x 100 gp = 100 GP * 1.5 = 150 GP
+4 competence bonus on Charisma checks and Charisma-based skill checks as they relate to dealing with dwarves, a +2 competence bonus on similar checks when dealing with gnomes and halflings, and a –2 competence penalty on similar checks when dealing with anyone else
Let's assume this one is a wash and isn’t worth much except it might be worth a LOT to a dwarf (turning him into a Dwarf among Dwarves) considering only dwarves can craft this item. But, let’s be generous and make it a zero cost. Remember, to interact with other non-small races NPCs, all the user has to do is take off the Belt. It is nowhere near curse level.
Note: I decreased the cost by 25% for any ability that adds a bonus (e.g. a save) because Dwarves cannot use that bonus, but did not decrease it for any full blown ability (like speaking, reading and writing Dwarven) because this item would not benefit anyone with that ability already, not just Dwarfs (remember, items like Rings of Evasion do not decrease the cost because most Rogues and Monks cannot use them for a full blown feat).
And, I did not throw in a masterwork item cost.
Total Creation Cost: 12000 + 18000 + 9000 + 4500 + 1500 + 150 = 45150 GP
Total Market Value: 90300 GP
The Market Value of the actual item is 14900 GP or about 1/6th of what the (being very generous) equations state it should be.
Now, how is a DM supposed to figure that out?
Answer: He cannot. It is total guesswork on how WotC calculated this stuff, but they sure as heck did not use their own equations.