An Attempt to Open "Pandora's Box"

When measuring something, most have a straight mind to look at its price. Any item in the society where we live is more easily evaluated when it is given a number value. The number is given on the basis of what it is and what are the components that make up the cost. For example, a car or a TV can be priced according to its material and labor costs. However, we cannot measure art or culture simply with those economic costs, since the value of some of them, in particular a masterpiece or a historic monument is much higher than the economic costs that have ever been spent on creating them. Skim the artworks that have been sold by auction in recent years and you will have to notice how exclusive their values were established. Jackson Pollock’s “No.5, 1948” was sold in a private sale via Sotheby’s for $140 million in 2006. In the same year, Willem de Kooning’s “Woman III” was sold in a private sale via Larry Gagosian for $137.5 million. In 2008, Andy Warhol’s “Eight Elvises” was auctioned by Philippe Ségalot for $100 million and Francis Bacon’s “Triptych, 1976” was sold by Sotheby’s New York for $86.3 million. In 2010, Pablo Picasso’s “Nude, Green Leaves and Bust” was sold by Christie’s New York for $106.5 million. In addition, the world’s most famous paintings, especially old masterpieces done before 1800 are owned by museum, which were rarely sold and as such, they are in principle priceless. “So that the prices of such art objects maybe strictly unnatural in the classical sense (Baumol, 1866).” The mystery of art price has evoked economist’s great interest. “What is the value of art and how can we measure it?” These questions have attracted the attention of economists, especially cultural economists for a considerable number of years. As an economist, they are expected to elaborate on the economic values of art for their own sake. However, “the economic value is hardly ever decisive in cultural disputes (Klamer, 2001)”. They understand that the value of a Pablo Picasso does not rely on the costs of his time and materials like regular work. “It is different because people treat it differently (Klamer, 2001).” People are buying a painting not only because it is a painting. They appreciate its artistic, aesthetic, unique or other special qualities. People are bidding a price for a wooden sculpture not because it is a piece of wood, but attributes to its symbolic meaning or inspiration that it provides to them. All those values are different from economic values in the classical sense. As cultural economist considers, they are cultural values that art inherently possesses. They make art exceptional and distinguish it from other goods. How to put a monetary term on those cultural values has been proven to be a difficult task for economists. This thesis is taking this challenge and exploring cultural value of art on the Dutch art rental market. The focus is on the measurement of this value in an economic context. As a cultural economist, we expect to find out whether we can measure it from the economic perspective. In addition, we try to examine what are the difficulties of measuring it in the economic context.