No full-text available
To read the full-text of this research,
you can request a copy directly from the author.
Historic art exhibitions and modern day auction results
Abstract
This paper uses historic art exhibitions in order to investigate the impact of the contemporary success of artistic careers on today׳s auction prices of modern paintings. That is, if an artist׳s work was displayed at a historic art exhibition in a given year, paintings dated from this year fetch higher prices at auction today. This can be attributed to two effects: artists who participated in such shows were already acknowledged as superstars contemporaneously and participants in art exhibitions benefited from a longer-lasting career boost as reflected by positive mark-ups on paintings made in the years following a show. For both channels, participation in historic art exhibitions is a strong quality signal for today׳s art buyers. This study is based on a global sample of 273 ‘superstars’ of modern art born between 1800 and 1945, 34,141 auction results of paintings and participation in important historic art exhibitions.
... Some of the control variables have standard implications found in other investigations of historical art markets (Etro and Pagani, 2012;Etro and Stepanova, 20152016, 2017: copies and paintings sold in groups are priced less, while weak results emerge on the support of the painting (mainly because it was rarely recorded in the catalogues). Other proxies for the quality of the item, such as the presence of an inscription on the painting, the length of the description in the catalogue, a positive commentary in the same description and the record of previous or current owners are positively correlated with prices. ...
... From this, we build a dummy variable 'Beautiful' present in the regression as a proxy for quality. Unfortunately, we do not have systematic information on the exhibition history of the paintings (on its role in modern auctions seeHellmanzik, 2016). The genre of the paintings is rarely indicated, and we could not recover it in a reliable way from the titles in such a big data set. ...
We analyse the evolution of the price of paintings in London auctions with a unique data set of over 200,000 sales in the period 1780–1840. We build a price index for the representative painting through hedonic regressions controlling for the characteristics of auctions and paintings and for the artists’ fixed effects. The emergence of an efficient secondary art market was an important opportunity for portfolio diversification. Estimating a CAPM model for art investment suggests that British paintings could deliver a higher return compared to imported paintings and an attractive source of diversification relative to the contemporary stock market. This contributed to increase the demand for British art and, possibly, to promote the innovations of its Golden Age. While the representative painting of the British school was initially undervalued, new British painters reached foreign prices by the beginning of 1800s.
... Hautala and Nordström (2019) and Hirvi (2015) analyze the mobility of Finnish artists in Berlin, revealing the advantages and challenges of international mobility for artists. Hellmanzik (2014Hellmanzik ( , 2016 shows that artistic affiliations and participation in historical exhibitions increase the value of artworks, but these benefits are often unevenly distributed, favoring those with established recognition. ...
This article explores trends in the empirical studies on the careers of visual artists over the past decade. Methodologically, we used the Louvain algorithm to perform a co-occurrence analysis, revealing thematic clusters. This approach enabled us to identify five distinct trends, each highlighting specific aspects and the geographical diversity of visual artists’ careers, which were then evaluated using a thematic map. The main findings revealed that “working conditions, income inequalities, and professional practices in the creative and cultural industries” stand out as a central and influential theme, with a significant impact and notable advances that have shaped recent discussions and practices. The themes “professional dynamics, cultural policies, and career strategies in contemporary art” and “dynamics of artistic careers, resilience, and support policies in contemporary art” are well-developed and have a solid research base, offering an in-depth understanding of the relevant topics. The theme “positioning and success strategies of artists in the contemporary art market” represents an emerging theme that is receiving increasing attention and is likely to become prominent, while the theme “gender inequalities, geographical mobility, and dynamics of artistic clusters” indicates a waning influence for various reasons. The results obtained aim to provide concrete guidance to researchers and the institutions that confer legitimacy in the visual arts world. By shedding light on contemporary issues related to the construction of visual artists’ careers from a global perspective, this study contributes to a deeper understanding of current dynamics.
... Hellmanzik analyzed 34,141 auction results for 273 modern artists born between 1800 and 1945, concluding that "artists who had works displayed in a historic art exhibition and thus were critically acclaimed by their contemporaries also fetch higher prices at auction today." 59 Historic art exhibitions are defined as "group exhibitions 'that made art history.'" 60 Hellmanzik "attribute(s) this effect to a strong quality signal which translates into higher prices." ...
For artists already participating in the art market, appropriating the tools of finance may help them to gain more control and protection in this financializing field. Art Investment 2014-Art Asset 1 is a tactical intervention by this author that is grounded in institutional critique methods – including Bourdieuian sociological analysis – that uses scraped stock market data-feeds to visualize the performance of companies on the Skate’s Art Stock Index (SASI). The SASI is an art industry index fund that provides investors with access to the art market without buying art. Art indexes such as the SASI reduce the impact of an artist’s work to a data-point averaged alongside the expected quarterly profit of major auction houses. As such, the SASI represents a total financial abstraction. Examination reveals the index’s lack of objectivity and raises doubts about its ability to represent the industry. Art market financialization threatens to shift the field from pre-capitalist logic, which disavows profit-seeking, towards increasingly profit-driven motives, leading to financial abstraction and the transposition of technical obscurity from the field of finance. Art Investment 2014-AA1 makes the SASI into an artwork: its placement in a museum underscores the role of the museum in the market. The ‘art index as art’ exposes and inverts the logic of art investment, while questioning assumptions underpinning the art index: including the notion that value can be financially abstracted from art objects. Despite the discontinuation of the SASI, art market financialization shows no signs of diminishing, and there is still room for creative intervention.
Die kunsthistorische und wirtschaftswissenschaftliche Forschung analysiert erstmals den KünstlerInnenfragebogen von Art-Investor aus dem Jahr 2002. Der Blick ist gezielt auf die befragten KünstlerInnen gelegt und bezieht die publizierten Essays nicht mit ein. Zum einen werden die demografischen Daten der insgesamt 36 KünstlerInnen ausgewertet und zum anderen die Antworten der 20 Fragen. Somit schafft die Arbeit explizit Raum für die KünstlerInnen und deren Aussagen, um Transparenz in einem Themenfeld zu schaffen, in welchem KunsthistorikerInnen oftmals nur mutmaßen. Mittels statistischer Analysen werden die Daten analysiert, die Ergebnisse in die entsprechende Forschungsliteratur eingeordnet und diskutiert. Die Arbeit zeigt einerseits, dass die Stichprobenauswahl ähnlichen Datensets entspricht (Künstlerinnen sind mit 13,9% unterrepräsentiert, die Befragten stammen vorranging aus Deutschland, ein Durchschnittsalter von 58 Jahren, KünstlerInnen sind aktiv auf dem Kunstmarkt), sodass die Ergebnisse zwar als indikativ, aber dennoch realistisch zu bewerten sind. Andererseits schaffen die Antworten der KünstlerInnen Einblicke in deren Persönlichkeit und Ansichten, wodurch sich Sympathien oder Antipathien ergeben können. Das Ergebnis der vorsichtigen Regression belegt, dass die KünstlerInnen ihren Beruf gewählt haben, weil sie stark motiviert sind zu malen oder die Bildhauerei zu betreiben. Die Ausübung von Kunst ist ihnen sehr wichtig, sodass die Frage nach der Sinnhaftigkeit von Malerei den größten Einfluss auf die Wahl des KünstlerInnenseins hat. Die Arbeit verleiht den KünstlerInnen auf wissenschaftliche Weise Gehör.
We study return rates on art investment using a complete dataset on repeated sales for Old Master Paintings, Modern art and Contemporary art auctioned worldwide at Christie's and Sotheby's from 2000 to 2018. We show that return rates do not depend systematically on past prices or the place of sale, but we emphasize substantial differences in returns across sectors. We also control for changes in transaction costs (buyers’ premiums and artists’ resale rights), characteristics of the sale (evening sales, price guarantees and past bought-ins) and news on the lots (changed attributions, public exhibitions or death of the author) that appear reflected in art returns. We confirm the absence of masterpiece effects in American, Chinese and Ethnic art. Finally, using historical data on prices during Renaissance, Baroque and Neoclassical periods, we find evidence that price changes are independent from initial prices also in the long run.
The chapter begins with the diamond-water paradox or paradox of value by Smith (The Wealth of Nations, 1776/1981) and introduces the second discussion by Smith (Lectures on Justice, Police, Revenue and Arms. Delivered in the University of Glasgow: Reported by a Student in 1763 and Edited with an Introduction and Notes, By Edwin Cannan. Oxford: Clarendon Press. Retrieved from http://oll.libertyfund.org/titles/2621. Accessed 4 Sept 2018, 1766/1896). The rest of the chapter is divided into several sections, which discuss important contributions of social scientists, from Adam Smith to Karl Marx, on the valuation theories. It discusses how the value became a measurement of pleasure and pain, why certain things should be considered more valuable than others, the concept of utility, and the development of the labour theory of value.
We analyze art pricing in a unique dataset on Madrid inventories between 1600 and 1750. We estimate a price index for the Spanish art market that is used for a general historical analysis of art during this period, showing a large increase in the real price of paintings during the XVII century. Then we examine the price differential between domestic and foreign paintings: At the beginning of the century domestic production was priced substantially below imported paintings, but the price gap was gradually reduced during the century. We argue that such a price convergence was not the fruit of variations in real exchange rate, relative supply or home bias, but was associated with increasing prices for the new domestic painters of the XVII century. Increasing remuneration for painting may have induced artistic innovations by domestic producers and created the conditions for the development of the Siglo de Oro of Spanish art.
This work investigates whether art specialists provide good predictors of realized prices for Picasso paintings. A sample selection model is proposed to represent the decision of the seller and the price equation. The model is applied to data on 675 Picasso paintings for the period 1975-1994. It is found that the two auction houses, Sotheby's and Christie's, have given good predictions for the works that have been sold. However, for the unsold works, it would have been possible to give estimates better than those given by the salerooms. As a consequence they could perhaps have sold more paintings than they actually did.
Age curves, which relate age to creativity or exceptional achievements, seem to take two forms: some artists bloom early (Picasso),
others later in life (Cézanne). We argue that this objective fact is not related to their mode of creation according to which
some artists proceed by drawings made prior to the painting's execution, while others are more likely to imitate and achieve
this through color and the process of painting itself.
The role of experts is dramatically increasing in our societies, where sorting information about quality is becoming more and more difficult. This paper looks at expertise in the arts (movies, novels and musical interpretation) and shows that expert opinion given shortly after the work has been produced (Oscars, prizes, rankings in musical competitions) may influence success, though it does not always recognize talent and does often not survive the "test of time," considered by many art philosophers, since Hume, as one of the possible measures of fundamental aesthetic quality.
The authors collect information on visual artists to allow a broad historical ranking of the most prominent artists. Their purpose is to examine the birth and work locations, and the consequential pattern of labor movement, of prominent artists over a number of long time periods. The article indicates that a relatively simple column-inch approach may suffice for the purpose of identifying the thousand or so most prominent artists, but that much more detailed source material is then required to examine the labor mobility experiences of these artists. A significant bias to the home or target market country is posited in the ranking of artists across countries, even in prestigious publications. Some preliminary data are provided on the ranking of artists by country of birth, covering a very broad historical sweep.
We conduct an empirical analysis of the effect on the auction price of a Canadian painting of the age of the painter at the time of creation of the painting. We consider over two hundred artists, active over the entire history of Canadian art, who are pooled in the estimation of a hedonic regression in which a polynomial function in age enters as a regressor along with several other control variables. We consider the possibility that the age-price relationship has changed over time by: (a) estimating separate age-price functions for three generational groups of artists-those born before 1880, between 1880 and 1920, and after 1920 and thus coming of age in the world of post-war 'contemporary art' and (b) estimating a parameterization where the shape of the age-price profile is permitted to change continuously depending on the year of birth of the artist. Our principal result is that artists born more recently tend to 'peak' earlier in their careers than those of previous generations.
We estimate the effect of ordering by value on revenues in sequential art auctions held by Sotheby’s and Christie’s. We exploit a pre-determined rotation of which of these two houses holds their auction first during auction week in New York City. When the house that goes first has relatively expensive paintings compared to the other house, we find that the sale premium for the week is around 21% higher relative to the mean sale premium, and the fraction of paintings sold during the week is around 11% higher. We provide evidence that this is due to an anchoring effect.
The 'Halo Effect' occurs when lotto ticket sales are unexpectedly high following a large jackpot. An examination of the Powerball lottery finds evidence that the halo effect exists and that it is the result of bettors exchanging prize winnings for new tickets.
This paper investigates whether travel increases the value of paintings produced by modern visual artists. The analysis is based on the 214 most prominent modern visual artists born between 1850 and 1945 and auction records of their paintings over the past 20 years. We find that artworks produced in the year of a journey are 7% more valuable than paintings produced in periods with no travel. We attribute this effect to human capital investments, knowledge spillovers and inspiration from the travel destination itself. There are persistent, but declining benefits to travel over the subsequent 4 years. The analysis shows that the impact of travel is smaller for later periods as modern art becomes more abstract. The effect on the value of paintings differs depending on the purpose of a journey: work-related, recreational and politically motivated journeys have a positive contemporaneous effect on value, whereas educational journeys have a negative effect. In addition, we find that France, Germany and the United States are the most frequently visited destinations for modern artists and also yield considerable benefits during times of strong innovation.
We study the seventeenth-century market for figurative paintings in Italy analyzing original contracts between patrons and artists. We show that a number of supply and demand factors affected prices. We find a positive and concave relation between prices and size of paintings reflecting economies of scale. We show evidence of a positive relationship between prices and the number of figures depicted. Trade in paintings was sufficient to equalize prices between different destinations. Finally, we provide support for the Galenson hypothesis of a positive relation between age of experimental artists and quality as priced by the market.
An article by John O'Hagan and Elish Kelly in 2005 (see Historical Methods 38:118-25) discussed collecting information on visual artists that would allow a broad historical ranking based on "prominence." O'Hagan and Kelly collected these data to examine prominent artists' birth locations, work locations, and their consequential patterns of labor movement during several long periods. In this article, the authors examine artists' migration for four periods (based on their date of birth): Renaissance Italy, Europe in the first half of the nineteenth century, and the Western world in general for the periods 1850-99 and 1900-49. The data show that important artists clustered in all periods at a remarkably high level. Florence and Rome dominated in Renaissance Italy, with significant clustering because of the artists' birthplaces and domestic migration. Paris and London witnessed a marked clustering of artists born in the first half of the nineteenth century, with Paris continuing to dominate among artists born in the second half of the nineteenth century. Artists born in the first half of the twentieth century clustered in New York City, with all prominent American artists clustering there.
This paper investigates the price determinants and investment performance of art. We apply a hedonic regression analysis to a new data set of more than one million auction transactions of paintings and works on paper. Based on the resulting price index, we conclude that art has appreciated in value by a moderate 3.97% per year, in real U.S. dollar terms, between 1957 and 2007. This is a performance similar to that of corporate bonds—at much higher risk. A repeat-sales regression on a subset of the data demonstrates the robustness of our index. Next, quantile regressions document larger average price appreciations (and higher volatilities) in more expensive price brackets. We also find variation in historical returns across mediums and movements. Finally, we show that measures of high-income consumer confidence and art market sentiment predict art price trends.
This paper was accepted by Wei Xiong, finance.
In hedonic regression models of the valuation of works of art, the age at which an artist produces a particular work, or an indicator variable for periods in his or her artistic career, is often found to have highly significant predictive value. Most existing results are based on regressions that pool large groups of painters. Although it is of interest to estimate such regressions for individual artists, the sample sizes are often inadequate for a model that would also include the large number of other relevant variables. We address this problem of inadequate degrees of freedom in individual artist regressions by using two statistical methods (model averaging and dimension reduction) to incorporate information from a potentially large number of predictor variables, allowing us to work with relatively small samples. We find that individual age-valuation profiles can differ substantially from general pooled profiles, suggesting that methods that are more responsive to the unique features of individual artists may provide better predictions of art valuations at auction.
This paper is based on a global sample of the 214 most prominent modern visual artists born 1850–1945. Two analytical methods
are used to analyse the age at which artists produce their best works—one based on year-of-birth cohorts of modern visual
artists and the other on stylistic groups. The cohort-analysis shows that the career patterns develop similarly over time
for artists working in the USA and Europe; over time the artists’ peak ages first increase, reach their maximum for artists
born between 1890 and 1909, and then decrease again. The study of stylistic groups shows that artists associated with Fauvism,
the Nabis and Post-Impressionism experience an early peak, whereas artists associated with Surrealism, Impressionism, Abstract
Expressionism, Art Informel, Pop Art, Expressionism and Cubism peak later in their careers.
Art price indexes typically rely on heavily biased samples for several reasons. A refined hedonic index is developed which explicitly addresses such concerns. An empirical illustration is then provided for Symbolist paintings appearing at auctions between 1990 and 2001.
This paper shows that ‘location matters’ in terms of premiums on creative clusters and peak ages. The analysis is based on the 214 most prominent modern visual artists born 1850–1945 and the art clusters of Paris and New York. Auction records of the past 20 years are used to estimate the value of artworks over an artist's career. The overall cluster premium for paintings produced in Paris and New York is found to be 11% and 43%, respectively; paintings made in Paris during the First World War have a premium of 14% while those produced between 1946 and 1975 have a premium of 27%. New York offers premiums for paintings produced there for all periods after the First World War, peaking at 74% between 1946 and 1975. When decomposing this premium, we find that quality rather than quantity of artists in the location is driving the results. It is argued that artists working in a cluster location reach a peak in the age–price profile of their work significantly earlier than artists working elsewhere.
We study the location-specific component of research productivity for economics and finance faculty over the last three decades. We find that there was a positive effect of being affiliated with a top 25 university in the 1970s; this effect weakened in the 1980s and disappeared in the 1990s. The decline in elite university fixed effect is due to the reduced importance of physical access to productive research colleagues, which in turn seems due to innovations in communication technology. One implication is that knowledge-based organizations should find it more difficult to capture rents vis-à-vis workers. We find that faculty salaries increased the most where the estimated spillover dropped the most. Despite the loss in local spillovers, elite universities still enjoy an edge in average productivity because of agglomeration of top researchers in prestigious institutions with high long-term research reputations.
Sociologists and organizational theorists have long claimed that the processes of knowledge creation and distribution are fundamentally social. Following in this tradition, we explore the effect of institutional prestige on university technology licensing. Empirically, we examine the influence of university prestige on the annual rate of technology licensing by 102 universities from 1991--1998. We show that institutional prestige increases a university's licensing rate over and above the rate that is explained by the university's past licensing performance. Because licensing success positively impacts future invention production, we argue that institutional prestige leads to stratification in the creation and distribution of university-generated knowledge.
We estimate the magnitude of spillovers generated by 112 academic “superstars”
who died prematurely and unexpectedly, thus providing an exogenous source
of variation in the structure of their collaborators’ coauthorship networks. Following
the death of a superstar, we find that collaborators experience, on average,
a lasting 5% to 8% decline in their quality-adjusted publication rates. By exploring
interactions of the treatment effect with a variety of star, coauthor, and
star/coauthor dyad characteristics, we seek to adjudicate between plausible mechanisms
that might explain this finding. Taken together, our results suggest that
spillovers are circumscribed in idea space, but less so in physical or social space.
In particular, superstar extinction reveals the boundaries of the scientific field to
which the star contributes—the “invisible college.”
Psychologists have found that the age at which successful practitioners typically do their best work varies across professions, but they have not considered whether these peak ages change over time, as economic models suggest they might. Using auction records, we estimate the relationship between artists' ages and the value of their paintings for two successive cohorts of leading modern American painters: de Kooning, Pollock, Rothko, and others born during 19001920 and Frank Stella, Warhol, and others born during 192140. We find that a substantial decline occurred over time in the age at which these artists produced their most valuableand most importantwork and argue that this was caused by a shift in the nature of the demand for modern art during the 1950s.
The valuation of Canadian paintings is analysed empirically. Using a sample of auction prices for major Canadian painters for the period 1968–2001, we run hedonic regressions to analyse the influence of various factors, including painter identity, on auction prices, as well as to construct a market price index. This index is used in a second-stage analysis in which we analyse the properties of Canadian art viewed as an investment asset. We apply standard asset pricing theory, as incorporated in the capital asset pricing model (CAPM), to the analysis of price movements in the market for Canadian paintings.
Théorie du prix des actifs et évaluation de peintures canadiennes. Les auteurs font une étude empirique de l’évaluation de peintures canadiennes. A partir d’un échantillon de prix d’encan pour la période 1968–2001, ils estiment une régression hédonique qui leur permet d’analyser l’effet sur le prix de quelques variables comme l’identité du peintre, et de construire un indice de prix dans le temps. Cet indice est utilisé pour étudier les rendements sur les peintures considérées comme des investissements. On utilise le modèle d’évaluation des actifs financiers (MÉDAF) pour analyser ces mouvements de prix.