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Can Art Prices be Calculated
With Mathematical Formulas?
Q: Is it possible to calculate the value of a work of art by using mathematical formulas? Is it possible to rank artists in order of importance the same way? Can you predict the future of the art market by using math or science or extrapolating from graphs?
A: In spite of the fact that researchers continually claim to have reduced the art business to mathematical formulas, charts and graphs, the answer to all of the above questions is a resounding NO. The main problem with attempting to quantify transactions in art is that art is a subjective medium-- it does not operate according to the same fundamental laws of science or mathematics that apply to the rest the universe. Sure, art has physical characteristics like weight, dimensions, material ingredients and so on, but determining a work of art's value or significance either now or at any point in the future does not simply depend on how large it is, what the subject matter is, or how much paint was used to paint it. It's way more complicated than that.
People collect and buy art for innumerable reasons-- all kinds of reasons, many of them personal and intimate-- not because they're conforming to quantifiable behaviors that can be explained or expressed by equations. They choose to buy particular works of art because they feel certain attachments or connections to them or impulses to acquire them at specific points in time. How much they pay for them depends on an astounding array of factors including where they're buying, who they're buying from, how much money they have to spend, their emotional responses or connections to the work, how much they like the artists, how well they know the artists, how good they are at negotiating, what moods they're in at the point of purchase, how much their significant others like the art, how much they like the frames, whether they like the colors, how much or how little they like the sellers, whether they believe the sellers, how badly the sellers need the money, who's bidding against them and for what reasons (if they happen to buying at auction), and on and on and on...
In addition to an individual's willingness to pay a certain price for a certain piece of art at any given point in time, numerous additional outside factors also come into play. Since owning art is not necessary for human survival, prices tend to dip during tense international situations, conflicts or hostility, dips in local or regional or national economies, and during times of increased social or political unrest. A severe drought, for example, can temporarily depress the prices of a region's most collectible artists. Even bad weather the night of an auction or the fact that an auction is mistakenly scheduled at the same time as the Superbowl can adversely impact art prices. On the flip side, excess media attention on record art auction prices, fads, fashions, hype, a great economy, low interest rates, and easy credit can cause art prices to rise. And don't forget what happens when two egos clash over one piece of art at an auction. That's a situation where the opposing bidders can care far less about the art or what it's worth than who ends up owning it and how much they pay for it rather than how little.
That's not all. You also have variables relating to the art itself including what condition it's in, when it was created, what the subject matter is, what the dominant colors are, how good the frame is, whether it was pictured or featured online or in a book or catalog, shown at a significant art exhibit, whether the artist made a slight little mistake on a tree limb that bothers certain people when they look at it, what sort of mood the art imparts to viewers, what the critics or scholars say, and on and on and on. Anyone who tells you that they can scientifically or mathematically crunch these sorts of variables into universal formulas has probably also been abducted by space aliens.
But wait; there's more. Even if you ignore all of the above unquantifiables and set out to create a formula based solely on available past selling prices, you still run into big problems. Suppose, for example, that most sales of an artist's work take place privately at galleries or directly from the artists themselves, and that prices are neither published nor generally known. Suppose also that the art rarely appears on secondary markets or at auction and the few pieces that have are all inferior examples that all fared poorly and sold for far less than the best pieces sell for at galleries. As a result, any pricing formula based solely on known sales results will yield unrealistically low values. A similar situation exists when no top quality work of art by an artist has ever changed hands on the secondary market at a public sale or auction. Once again, anyone researching a superior work of art will end up with an unrealistically low value if they simply plug numbers into a formula based only on known sales results. Neither of these scenarios are unusual, by the way.
As for ranking artists, scholars and critics continually argue over who's more important, more influential, or has a greater impact on art history. One year it's one artist, the next year it's another. Some of these arguments have been raging for centuries. And don't forget trends-- who's hot and who's not-- today, this week or this month. Tastes and fashions of the times also tend to dictate who's viewed as more or less significant, collectible or valuable at any given moment. And when you're talking trends, prices can fluctuate wildly over relatively short periods of time. All you have to do is read art criticism of various time periods to see how rapidly artists can rise and fall in terms of how popular they are among collectors or how desirable their art is.
As for those who rank artists by gross sales totals over fixed periods of time, if no works of art by a given artist appear at auction or public sale during that time period, the artist ends up with a gross sales total of ZERO. You know what that means, don't you? Right. They don't make the list-- no matter how famous they are or how much their art sells for!
The same holds true for predicting the future of the art market, either segment by segment, artist by artist, or as a whole. Particular artists and styles of art fall into and out of favor with dealers, collectors, and scholars all the time. Plenty of art sold for higher prices twenty years ago than it sells for today. Plenty of art sells for high prices one decade, drops in value the next, and then rises again. Plenty of artists stop creating art altogether and their markets virtually evaporate in spite of the fact that they sold extremely well and for impressive dollar amounts while they were active. If you want to know the future of the art market and artists' selling prices dollar by dollar, you'd do better by calling the Psychic Hotline than plugging the numbers into meaningless formulas.
The moral of the story? The same as it's always been. If you see a work of art that you like, do online research and comparison shopping at sources offering works of art by the artist to determine current selling prices for comparable works to the one you're considering, make sure you're paying fairly, and then buy because you like it. That way, no matter what happens to its value over time, you'll always enjoy looking at it.