Unraveling Art Prices

The prices paid during art auctions often seem to have lost any sense of reality. Though sales on the primary market are less spectacular in terms of price, they are also surrounded by a lot of insecurity and complex interactions. Therefore, the goal of this quantitative study is to gain more understanding of the primary art market and the determinants of art prices. A unique database provided by the Mondrian Foundation, consisting of more than 29.000 entries including information on art sales, was used as the basis for the analyses. Additionally, variables on the about 1.500 artists and 200 galleries were added in order to be able to compare the research with the first study done this way on the Dutch primary art market. New variables like style of the artist and art fair participation were added to start new paths for further research. The multilevel analyses included variables on the levels of art work, artist and gallery. This multilevel structure accounted for the hierarchy in the data. The results showed that the variables on art work level explain the most variance, followed by artists variables. Gallery variables explain a very small amount of the total variance. On the different levels, category, year of sale, gender, age, art fair participation and location of the gallery appear to have the most influence on the price.