AFAIK today's capacitive and inductive encoders use continuous AC signal to measure the impedance of variable elements. They need dedicated analog circuits, tuning and close tolerance parts. These make them more expensive.
BTW I'm not deeply familiar with analog circuits, so in my other project from last year I used a different approach. It is easier (for me) to understand.
So, I like robotics. Pro robots usually use servo motors, they are expensive. Good quality motors are expensive, but decent brushed or brushless DC motors can be found for good price. For one-off projects, even scavanged parts can be used.
High resolution encoders are also expensive, especially absolute scaled, and reliable ones. Cheaper encoders are only incremental and/or bulky. CUI's (AMT series) encoders look nice, but the cca. 50 USD is still a solid investment for a hobbyist (you rarely need only one for a project). Can they be even cheaper? Two PCBs and an MCU cheap?