Have you ever wondered why some works of art can reach millions at auction whereas some works don’t even make a splash?
According to Michael Findlay, the author of The Value of Art: “Human stipulation and declaration create and sustain the commercial value [of art].”
There are two main art markets. The Primary and Secondary markets and these two markets behave very differently from each other.
The Primary Market is where the artist receives direct payment for his/her skill and time plus the cost of bringing thier work to market. Size usually is the determining factor when it comes to the price of an artwork in the primary market. The larger the piece the higher the price, with exceptions of pieces that are too large to be installed in homes. Unusually large pieces would need space in institutions, office buildings or shopping malls. These are usually less expensive because they are harder to sell.
Depending on the medium used there might be a cost of manufacture to consider. Another consideration is the number of editions that have been created. Many artist create sculptures in editions and the primary market will pay less for each individual sculpture than for a unique work of a similar size, medium and style.
The Secondary Market consists of the buying and selling of second hand art. This market if fuelled by the principle of supply and demand. “Real or imagined rarity is the ne plus ultra when art is sold.” Rarity also not only justify the high prices art can fetch, it also suggests an exclusive club ownership.
Claims of rarity have to be investigated because not only do artists explore different themes in a variety of mediums (paint, pastel, pencil, print) but total output varies widely from artist to artist. Monet produced 2000 paintings in his 86 years of life, Van Gogh died at 37 and produced 864 paintings and Jackson Pollock died at 44 and produced 382 works on canvas. The most useful tool in determining just how many paintings an artist made of any particular type is the comprehensive listings of his/her entire output known as the catalogue raisonné.
“Most catalogue raisonnés indicate the past and present owners of each work listed. A knowledgeable dealer will be able to combine the information in the catalogue raisonné with his or her own knowledge of current ownership and infer how many (or rather, how few) of a particular type of work are ever likely to be sold.”
The publication of a catalogue raisonné may have a strong effect on the value of an artist’s work because it defines the supply and provides the basis for reasonable assumptions regarding whether any particular work might be available.
All works owned privately, even those that are promised to be gifted but not yet given to museums, are in fact potentially available. Works that have been formally accessioned by public museums are considered off the market. The more works an established artist has in public museums the smaller the supply for the market and the higher the value of those artworks that do circulate.
In many countries in Europe and Asia museums are owned by governments and are prohibited from selling. The likeliest candidates to go up for auction are donated works that duplicate what the museums already holds and works of such blatant inferiority that they are likely never to be exhibited.
In other words one might assume that there are thousands of Van Gogh’s going up for auction weekly and fetching astronomical figures. But the truth is that the number of Van Gogh’s in private collections is minuscule and the chances of them going up for sale is once in a lifetime. There are many more buyers for coveted pieces of art than there are pieces of art for buyers.
You can find out more on the topic by reading The Value of Art by Michael Findlay.