Art valuation

Art valuation, an art-specific subset of financial valuation, is the process of estimating the potential market value of works of art and as such is a financial rather than an aesthetic concern. Art valuation involves comparing data from multiple sources such as art auction houses, private and corporate collectors, curators, and specialized analysts to arrive at a value. Art valuation is accomplished not only for investment and financing purposes, but as part of estate valuations, for charitable contributions, for tax planning, insurance, and loan collateral purposes.

The art market operates in an economic model that considers more than supply and demand: is a hybrid type of prediction market where art is bought and sold for values based not only on its perceived cultural value but on its predicted future monetary value, thus valuing artworks for such a market takes into account a variety of factors. Alpha consumers (trend-setters) and gallery or agent promotion are the prime forces at work in valuing new, contemporary art that has no predictive market history and thus its valuation is more difficult and speculative.

Art valuation activity concerns itself with estimating market demand, liquidity capability of lots, works, and artists, and valuation trends such as average sale price and mean estimates. Unlike in the securities market where millions of people and firms participate in buying and selling financial instruments, art market activity largely follows the demands of private collectors, museums, and large corporate interests as the primary market participants. Because the art market's participants are far more limited in number than the securities market, art valuation relies to a great extent on the advice of experienced private collectors, curators, and specialized market analysts, and this limitation in turn increases the risk that some items may be over or undervalued. In the case of contemporary art especially, when an artist is not well known and hasn't any auction history, the risks of incorrect valuation are greater. Valuation estimates are given in ranges of prices to offset uncertainty.

Research data available from art auction houses such as Christie's, Sotheby's and Phillips de Pury & Company are those tracking market trends such as yearly lot transactions, bought-in stats, sales volume, price levels, and pre-auction estimates.

Another difference with valuations made for the securities market is that the art market is seasonal, rather than ongoing, thus art valuations made for an autumn auction may be unrealistic for the following spring auction season.

See also

• Art finance
• Art sale
• Art world economics
• Auction
• Blockage discount
• Market demand
• Markets
• Valuation

External links

• Kuspit, Art Values or Money Values?, ARTnet, 3/6/07.[2]
• Dunbier, Fine Art Comparables, tfaoi.org, Part 1 and Part 2
• The Dunbier System & ENCompass 22,000 Artist Directory [3], an early computerized valuation method no longer updated.
• Gerzog, Valuing Art in an Estate, Tax Analysts, Tax Notes, Vol. 117, Nov. 5, 2007. [4]
• Fitz Gibbon, From Prints to Posters: The Production of Artistic Value in a Popular Art World, Symbolic Interaction, Spring 1987, Vol. 10, No. 1, Pages 111–128 , DOI 10.1525/si.1987.10.1.111 (abstract).[5]
• Marshall & Chisti, An Exploration of the Relationships of Physical Features of Art Works to Art Valuations and Selling Prices in Fundraising, Society of Business, Industry and Economics, Proceedings 2006, p.81. [6]
• Generally:
  • Artinfo searchable Sale Index [7], art market news [8]
  • Artnet News [9]
  • ARTnews (magazine) [10]
  • Artprice.com [11], sample estimate [12]
  • AskART.com [13] (oriented toward American art)