Reputation, Price, And Death: An Empirical Analysis Of Art Price Formation
AbstractWe analyze how an artistâs death influences the market prices of her works of art. Death has two opposing effects on art prices. By irrevocably restricting the artistâs oeuvre, prices, ceteris paribus, increase when the artist dies. On the other hand, an untimely death may well frustrate the collectorsâ hopes of owning artwork that will, as the artistâs career progresses, become generally known and appreciated. By frustrating expected future name recognition, death impacts negatively on art prices. In conjunction, these two channels of influence give rise to a hump-shaped relationship between age at death and death-induced price changes. Using transactions from fine art auctions, we show that the empirically identified death effects indeed conform to our theoretical predictions. We derive our results from hedonic art price regressions, making use of a data set which exceeds the sample size of traditional studies in cultural economics by an order of magnitude.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 49 (2011)
Issue (Month): 3 (07)
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Other versions of this item:
- Heinrich Ursprung & Christian Wiermann, 2008. "Reputation, Price, and Death: An Empirical Analysis of Art Price Formation," CESifo Working Paper Series 2237, CESifo Group Munich.
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
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