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section heading icon     sale indexes

This page considers art sale indexes and other data on the sale of collectibles.

It covers -

It is complemented by a note highlighting sources of data regarding nominal prices, purchasing power, wages and inflation in different eras and markets.

     introduction

Art sale records - sometimes characterised (disingenuously or otherwise) as 'art indexes' - have become a marketing tool for dealers, investors and journalists. They have also become a subject of fascination for academic economists and other scholars who, as highlighted earlier in this note, have crunched sales date to identify the most 'valuable' artist per square centimetre of canvas, whether creators optimise their value through a short career ('die young and leave a beautiful corpus'?) and other expressions of postgrad Trivial Pursuit.

This page considers the nature of those indexes and of data about other collectibles, along with comments regarding information use and misuse.

Individual enthusiasts throughout history have recorded the prices they paid for sculpture, paintings and other collectibles (or for commodities as mundane as bread, salt, beer and butter) or the prices paid by contemporaries. That information can sometimes be disinterred from diaries, wills, import declarations, letters and bankruptcy appraisals. It features in some of the retrospective wage/price indexes highlighted here. Some vendors have publicly advertised prices. Newspapers and other journals have often noted prices paid at auctions or other public sales.

Compilations of comprehensive lists of sale prices and analysis of that information to create composite figures for classes of works, genres or individual artists is however a recent phenomenon.

It essentially dates from the past forty years, ushered in by the Times-Sotheby's Index (1967-1970) that collated information from the major auction houses during a period of exuberance. That index has been emulated by other compilations, which have sought to attain the status enjoyed by more traditional bond and share market indexes published by corporate rating or other financial specialists such as Moody, Standard & Poor and Bloomberg.

Some sales indexes have remained records of prices in public sales. In principle such records allow year by year tracking of what has been paid for work by specific artists, for classes of works (eg Chinese ceramics or European paintings), for genres (Impressionist prints and Expressionist prints) and even - when there are repeat sales - for individual works. A crude version of such tracking is provided by the chronology later in this note.

Some publishers and consumers of sales records have processed the data, offering a statistical analysis and figures that are claimed to be representative of activity in markets. That reflects measures such as the FTSE and Dow Jones indexes that aggregate price movements across a class of shares to indicate whether a sharemarket is 'up' or 'down' (and by inference may be up or down tomorrow, next week, next month or next year and what rate the movement will take place).

     business

Unsurprisingly, there is a growing market for information about the sale of fine art and, by extension, other collectibles ranging from antique furniture to rare stamps, coins, cars and violins. A sufficient number of consumers are willing to pay for -

  • compilations (eg lists of prices at a particular event or from an auction house over several years)
  • 'value-added' publication (eg print and electronic sets of data that cover several auction houses and dealers or that feature statistical abstracts or that facilitate searching by genre, artist, location, price bracket or other attribute).

Some of those consumers are institutions. Others are dealers, auction houses, financial advisers, art market consultants and individuals.

Prices for access to the data reflect perceptions of what consumers will bear, the effort required to assemble the data (eg through scrutiny of a flood of media releases and even to have an observer physically present at a sale), investment in a database or collection of files created over many years, and the extent of competition. Some publishers for example are offering substantial 'teaser' access to online databases, with the expectation that revenue will come by selling whole-of-site access to corporate clients and from individual 'premium search' access.

Emphasis by some publishers on abstracts and search facilities reflects recognition that competitors are scraping data from their print and electronic publications for entry into commercial databases.

     data sources

Where does the data come from?

Contemporary indexes centre on data about public sales -

  • observation of prices through attendance at auctions
  • scrutiny of prices published in media releases, annual reports and promotional works from auction houses
  • scrutiny of prices identified in media releases and catalogues from dealers.

It is important to note that those indexes do not comprehensively cover private resales (eg direct from one collector to another), first sales (by an artist or dealer to a collector) and much work resold by dealers.

As a result they are biased towards 'high end' works and to items sold by major auction houses.

Individual dealers/auction houses and specialist publishers produce a range of print-format records - generally on an annual basis - of sales records.

Those publications are useful for analysis of trends but should be used with caution regarding individual sales, given recurrent indications (including successful prosecutions) that some reported sales to figures such as Alan Bond were in fact only on paper.

     analysis and action

Much index data is informative in retrospect, rather than as a predictor. It will tell you where the market has been (or where that market is claimed to have been), rather than where it is going to go.

Art price indexes are problematical. Indexes typically cover major works, rather than minor items. They cover public sales (principally at auctions) rather than private sales. Some figures are false (eg leading auction houses have admitted that some reported sales actually didn't occur or that the sale was strongly subsidised by a dealer or seller).

Consumers may draw the wrong conclusions from figures, eg that prices will rise steadily, that prices for a particular artist or genre will remain strong, that second-rank works by a master will appreciate faster than those of 'safer' first-rank works by that master or works by an emerging artist.

Data in the 1870s encouraged investment in painters such as Frith, Romney, Bougereau, Makart and Alma-Tadema. In real terms those prices have never recovered. Buying 20 Van Goghs in 1900 looks very astute if they were held for 70 years, unwise if sold after 5 years. Buying a cache of Warhols or Pollocks in the 1960s for sale in 2007 looks clever … but the investor would have got better returns from some blue chips such as IBM and Xerox, or from prescient investment in Apple and Microsoft.

     databases

Online data sources include -

Offline works of particular relevance for Australia and New Zealand include Edward Craig's multivolume Australian Art Auction Records (1975-2005), with some 185,000 sale records from 54 auction houses.

     faith in figures

The Art Newspaper editorialised in December 2006 that

in this murky world of rumour, affirmation, denial and reaffirmation, are auction prices the only reliable ones? After all these prices are made publicly, published by the auction houses, listed on art data sites such as artnet.com or artprice.com.

But even with auctions there's often more than meets the eye. For example, Cézanne's Rideau, Cruchon et Compotier, 1894, was sold at auction for $60.5m (Sotheby's New York 1999), but the deal was never completed, and the still-life was later resold for "significantly less" to Steve Wynn. Most lists of the most expensive paintings sold at auction still cite, somewhere in their nether regions, Van Gogh's Irises, 1889, which sold for $53.9m in 1997. In fact the work didn't sell - Sotheby's lent half of the price to the Australian tycoon Alan Bond to buy it. He never paid up and the painting ended up in the Getty, for - you've guessed it - an "undisclosed price".

In addition, auction houses are increasingly guaranteeing works, meaning that they will give the vendor an agreed price whatever the result of the sale. So, if a paintings sells for $2m, but is guaranteed for $2.5m, the difference is paid to the consignor. What then is the true price of the painting?

All this demonstrates the poor transparency of the art market, despite its huge - and growing - value. All attempts to measure it accurately, to predict its performance, to analyse it, either through sectors, individual artists or "baskets" of works of art, have floundered. As Sotheby's itself admitted in its annual financial filing on 16 March this year: "It is not possible to measure with any particular accuracy the entire international art market".

Problems are not an aberration of the 1990s. In 1985 for example Christie's New York executive David Bathurst admitted that in 1981 he had reported selling two paintings that had not in fact found buyers at auction: a Van Gogh at a supposed price of US$2.1 million and a Gauguin at US$1.3 million. Bathurst said he had lied - nothing like noblesse oblige - to protect the art market from depression.






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