values and valuation
This page considers the art valuation game.
It covers -
is complemented by a page
highlighting sources of data regarding nominal prices,
purchasing power, wages and inflation in different eras
What do the prices highlighted in the following pages
(and in other parts of this site) mean? Can values assigned
by appraisal specialists be trusted? What principles are
used in appraisal of a Rembrandt oil, kitsch by Jeff Koons
and Pro Hart, a unique gold coin from 846 AD or the 'Little
Black Dress' worn by Audrey Hepburn in Breakfast at
This note offers figures for the sale of selected artworks
and other collectibles since the 1850s, with some of the
more naive (or merely self-serving) enthusiasts claiming
that prices have consistently gone up in the past and
will do so in the future.
That is of course incorrect, as repeat sales of the Pre-Raphaelites
and landmark works such as Rembrandt's 1653 Aristotle
Contemplating A Bust of Homer demonstrate that prices
can fall in the long term and short term. Edward Burne-Jones'
Love and the Pilgrim (1896) for example, fetched
£5,775 in 1898, £210 in 1933 and £21
in 1942. Rembrandt's Aristotle was famously bought
by Erickson for US$750,000 in 1928, sold back to Duveen
for US$500,000, reacquired in 1936 for US$590,000 and
being sold to the Met for US$2.3 million in 1961.
More importantly, the figures in the following pages are
nominal: they do not offer a true indication of purchasing
power. A few hundred guineas in the 1780s might be the
equivalent of millions of dollars in the 1980s.
In terms of real rather than nominal prices the sums paid
by fin-de-siecle magnates such as JP Morgan, Frick, Kress,
Altman and Huntington for Georgian and Quattrocento paintings
landmarks. From the same perspective splurging in the
1890s on 'investment quality' art from now-forgotten figures
by Makart, Carolus-Duran, Friant and Meissonier rather
than contemporaries such as Monet and Manet seems foolish.
(One might wonder whether the US$23.6 million paid for
Jeff Koons's kitsch hot-pink stainless-steel Hanging
Heart in 2007 - an echo of the 6,300 guineas paid
for Edwin Long's Babylonian Marriage Market in
1882 - will look bizarre in 50, 100 or even 10 years time.)
It is a truism that a commodity is worth what a buyer
will pay for it, rather than a value assigned by a critic.
Given the influence of behavioural finance and perceptions
of rationality what a buyer will pay is influenced by
assessments from critics and from professional appraisal
specialists. One reason why people followed the 'wisdom
of crowds' (as articulated by contemporary academic authorities
and critics) in buying - or not buying - works by Alma-Tadema,
Cézanne, Sweerts, Vermeer and Cossington Smith
- was that they were sensible.
Another reason is that they were uncommitted, without
a passion for a particular genre, school or artist and
thus free to follow the herd. Saleroom price records,
like much history, are about winners - losers tend to
be invisible except as point of reference for anointing
prescience or good fortune.
A third reason, highlighted by David Lee, is that many
prices during the art bubble in 2007 reflected support
through dealers buying their own work -
whole thing smells of people trying to manipulate the
market and push up prices. It's not about art. The kind
of antics in the art world wouldn't be tolerated in
any other industry. It's all about keeping yourself
visible and your profile high. The people who get themselves
in the press and on TV are the ones who command the
highest prices. It's got nothing to do with art.
how much was it worth?
Determining past purchasing values is notoriously difficult.
Points of entry into literature on prices, incomes and
purchasing power include John McCusker's How much
is that in real money?: a historical price index for use
as a deflator of money values in the economy of the United
States (Worcester: American Antiquarian Society 2001)
and Brian Mitchell's European historical statistics,
1750-1975 (London: Macmillan 1980).
EH.Net offers indicators
of the comparative value of US money - Purchasing
Power of the Dollar, 1665 - Present and What
is the Relative Value? Five Ways to Compare the Worth
of a United States Dollar, 1789 - Present - along
with indicators of the purchasing power of the UK pound
1264-2002, UK average earnings and prices 1264-2002 and
the annual real and nominal GDP for the UK 1086-2000.
For a European converter prior to 1700 see the Marteau
project's Early 18th-Century Currency Converter.
The UC Davis Agricultural History Center site
features data for several foodstuffs and non-foodstuffs
for Istanbul 1469-1914, prices in Paris 1500-1870 and
some prices and wages in Spain 1500-1800. There is no
online value converter for Australia and New Zealand.
More vivid illustrations of value are provided by some
Beauman in The Pineapple, King of Fruits (London:
Chatto & Windus 2005) for example notes that once
all the expenses of a glasshouse, a stove (and associated
garden boy to tend it full-time) and a stock of costly
pineapple plants are considered the cost of a single English-raised
pineapple in the second half of the eighteenth century
was about £80 (perhaps £5,000 in today's money).
For the same money an art lover could buy a Canaletto,
with change left over for a Vermeer or two.
At a more elevated level insights are offered by Mary
Hollingsworth's analysis in The Cardinal’s Hat:
Money, Ambition and Housekeeping in a Renaissance Court
(London: Profile 2004) of the account books of Renaissance
grandee Ippolito d'Este, party animal and second son of
Lucretia Borgia, in Medici Money: Banking, Metaphysics
& Art in 15th Century Florence (London: Profile
2006) by Tim Parks and Shopping in the Renaissance
(New Haven: Yale Uni Press 2005) by Evelyn Welch.
Academics have tried to deconstruct sale prices, productivity
and quality. Leading examples are David Galenson's Quantifying
Artistic Success: Ranking French Painters - and Paintings
- from Impressionism to Cubism paper,
2005 Who Are the Greatest Living Artists? The View
from the Auction Market paper,
The Greatest Artists of the Twentieth Century
and Sebastian Edwards' 'The Economics of Latin American
Art: Creativity Patterns and Rates of Return' in 4(2)
Appraisal is an inexact art, rather than a science, particularly
for items that are unique, are thinly traded or that attract
little interest outside a particular jurisdiction (eg
there is little demand in Tokyo for Hans Heysen
and for Tom Thomson)
or speciality (eg early surgical tools).
It is complicated by the muddiness of much reported data
and by the absence of public information about sales below
the US$100,000 and $10,000 thresholds.
Appraisal is largely based on a sense of what works by
the same artist (or that creator's peers) have gone for
in the past and attributes such as -
status of the work (does it need restoration? has it
obviously been restored?)
and other indications of authenticity
significance or uniqueness
by independent scholars (eg discussion in an academic
monograph, in a catalogue raisonne or a major article)
through past sales (eg appearance in the catalogue issued
by a major auction house or by a prestigious dealer)
or through inclusion in an exhibition by a recognised
fit' (eg 'chocolate box' images by particular artists
have greater "wall power" and sell more quickly
than their more austere work)
of display and portability (watercolours and pastels
for example may be exquisite but adversely affected
by sunlight or contact; many collectors don’t
have the acreage required to display a 4 metre by 5
metre postmodern canvas, a maquette is more portable
than a large scale sculpture by Rodin or Serra)
externals such as stock market crashes, credit squeezes,
impending wars and media criticism of conspicuous consumption
Tyler Cowan waspishly commented that
can triple in value when there are horses or figures
in the foreground. Evidence of industry usually lowers
a picture’s value.
still life with flowers is worth more than one with
fruit. Roses stand at the top of the flower hierarchy.
Chrysanthemums and lupines (seen as working class) stand
at the bottom.
is a price hierarchy for animals. Purebred dogs help
a picture more than mongrels do. Spaniels are worth
more than collies. Racehorses are worth more than carthorses.
When it comes to game birds the following rule of thumb
holds: the more expensive it is to shoot the bird, the
more the bird adds to the value of the painting. A grouse
is worth more than a mallard, and the painter should
show the animal from the front, not the back.
adds value to a picture, but only if it is calm. Shipwrecks
are a no-no.
and oval works are extremely unpopular with buyers.
regimes typically feature some requirement for a formal
appraisal of gifts that involve tax concessions (for example
to an public art museum or a foundation) greater than
a particular level, eg US$5,000 in the US. Most such requirements
centre on the price a willing buyer would pay to a willing
seller, recent sales of similar assets or the cost to
reproduce the item (if the latter is an accurate representation
of fair market value).
Appraisal similarly features in estate planning, divorce
and insurance arrangements.
Most regimes restrict appraisals for official purposes
(eg for tax deductible donation of works to public art
museums) to registered valuers. The Australian register
in relation to the national Cultural Gifts Program, for
example, is here.
Questions of appraisal are discussed in Art in the
Courtroom (Westport: Greenwood 1998) edited by Vilis
Inde, Artful Ownership: Art Law, Valuation, and Commerce
in the United States, Canada & Mexico (Washington:
American Society of Appraisers 2000) by Aaron Milrad.
A point of reference is provided by the discussion of
domain name valuation here.
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