How to calculate the price of a work of art. Intro
How do you calculate the price of a work of art? How is the price of a work determined? What agreements are made between artists and gallery owners? Why do two works by the same artist have such different prices?
For those who live in the art world, the definition of the price of a work is a matter of course. Not that it is simple but it is part of the daily life of artists, gallery owners and collectors. It is like for a doctor to visit a patient or for an athlete to train before a competition.
For those who are passionate about art but have never had the opportunity to work in a gallery or in an artist’s studio, the theme of the price of the work is one of the most curious topics. How do you calculate the price of a work of art on the market, then?
The international auction records
That this curiosity on the part of all of us exists on the price of art more than on other objects does not surprise me. All this is probably due to the fact that we talk about the price of the works in the newspapers only in autumn and spring when the works are sold at stratospheric figures generating records and therefore a collective amazement.
Last of all, Salvator Mundi recently auctioned by Christie’s for 450 million dollars and which some sources claim was bought by a mysterious Saudi prince who will lend it to the Louvre in Abu Dhabi.
These news generate in our imagination the idea of a world for only great collectors such as Leonardo Di Caprio, but this represents only a small part of international collecting.understand together how the market works and how the price of a work of art is calculated fairs and auctions.
The logic of the art market
In other posts I have talked to you about art as an investment. And when works of art enter a market, they must naturally follow the logic of the market.
A market, that of art in which there are numerous players. Not only artists but galleries, museums, archives, auction houses and publishing houses but above all collectors.
The premise that must be made is price does not equal value. Numerous studies have been made on the contemporary art market. There are three criteria underlying the value of the work according to the protagonists of the art system themselves. Thequality of the work, the reputation of the artist and the price. How do you calculate the price of a work of art in practice?
How to calculate the price of a work of art. The mathematical formula and the coefficient
The mathematical formula that is applied mostly for paintings, photographs and sometimes sculptures is the sum of the base and the height of the work by the coefficient attributed to the artist, all multiplied by 10, but with some variations according to the medium.
(((base + height) * coefficient) * 10)
The strongest variable is rightly the coefficient which consists of a number that is attributed to the artist and decided according to the agreements with your gallery owner.
To establish this, it is based on the artist’s curriculum:
- participation in collective exhibitions or personal
- prizes won
- publications or acquisition by museums
The most correct parameter for evaluating the coefficient would be the demand for the works of a certain artist on the market. The request through, obviously, the evaluation of the supply / demand both in the gallery and in the auction. This is not always the case and in any case even this evaluation may not always be directly proportional.
The coefficient over time
The coefficient changes over time. When a young artist is sold in a gallery, he always starts with a coefficient of 1 in the calculation of the price to the public. But it is naturally purchased at a lower price by its gallery owner who has to intervene with the promotion and exhibition of the work.
The coefficient rises when prices begin to be confirmed and therefore people are already willing to pay that amount to buy a painting and in the meantime the emerging artist begins to build his own curriculum by participating in exhibitions or exhibiting in galleries or fairs.
Obviously, with the passage of time, if the interest in the artist’s work is confirmed and the galleries exhibiting his works promote the work in the best the coefficient can rise more and more or in the worst case remain stationary but very rarely decrease. Precisely for this reason, investment in art is to be considered one of the safest.
Different medium = different price
Sometimes it happens, however, that the coefficient of an artist varies according to the work. In fact, when the demand for a certain type of works whose medium is more appreciated by the public increases, the coefficient and therefore the price of that specific type may vary with respect to the standard. This usually occurs during periods considered to be the peak of activity or of greatest maturity.
However, the coefficient can also vary according to the medium, so for decades a work on canvas or an acrylic was considered of greater value than a work on paper. This vision has changed thanks to the passage in the 60s of many artists to the paper as the main medium of several of their works, we think in Italy of Alighiero Boetti or Giulio Paolini.
Works on paper. How do you calculate the price of a work of art
How do you calculate the price of a work of art on paper? When paper is not the artist’s main medium, a second mathematical formula is used which is applied and consists in discounting the price by 40% compared to one of his works of the same size on canvas.
In this case, therefore, the formula will be: (((base + height) * coefficient) * 10) – 40%
However, a distinction must be made between unique works on paper to which a discounted formula is applied and multiple works on paper as in the case of lithographs or serigraphs.
Multiple. How do you calculate the price of a work of art
how do you calculate the price of a work of art if it is a multiple? The price of multiples, in fact, varies a lot with respect to the price of a single work and this may depend on the circulation therefore on the number of copies that have been made of that work but also on the precise number of the copy.
The idea has become more and more widespread that the artist’s proofs that are made before the official and final edition are worth more.are sometimes worth more first numbers of an edition , therefore, to give a practical example, a copy 2 out of 100 will be worth more than a copy 52 out of 100 of the same work even if it was made at the same time.
Obviously, even for multiples there are differences related to the medium. Historically a work on multiple paper is worth less than a multiple in sculpture.
In these cases, in addition to an initial agreement between gallery owner and artist , demand will make a difference. It is always necessary to consider that multiple works usually play a secondary role in the artist’s production and therefore it is natural that they are linked to the dynamics of their own specific market.
Sculpture and photography. How to calculate the price of a work of art
How do you calculate the price of a work of art, photography or sculpture? Photography and sculpture are part of the dynamics of the market of the unique work and therefore of the definition of the price as we have seen it, but each with its own specific rules.
By convention, a sculpture is considered a unique work if it has been made in a maximum number of 9 specimens for which each specimen is considered a unique work. It becomes multiple when this number is exceeded.
The same criterion applies to photography and the prints made directly by the artist and in lower numbers are of greater value. So rarity becomes the most important variable.
Other factors to consider. Historicized Artists
There are other factors to consider when trying to understand how the price of a work of art is calculated. These are, in fact, the norms commonly used in the art market for works by emerging artists and are also to be applied to works by historicized artists but with some exceptions in the evaluation of the coefficient which rises considerably thanks to lucky auction passages that make them increase the demand and therefore the value on the market.
What we have seen together are only useful guidelines to establish a basis for defining the price of the work. However, these are constantly influenced by other factors:
- being alive
- the presence of an authentic or a reliable archiving certificate but this is a great chapter and I will tell you about it in a dedicated video
- publication in the general or reasoned catalog of the artist we will also talk about
- the presence on the market of confirmed fakes
The art system is extremely fascinating to me and I hope that this post and the video you find on Youtube together with the next ones can make you passionate about the subject too.