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Reputation, Price, And Death: An Empirical Analysis Of Art Price Formation

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  • HEINRICH W. URSPRUNG
  • CHRISTIAN WIERMANN

Abstract

We analyze how an artist’s death influences the market prices of her works of art. Death has two opposing effects on art prices. By irrevocably restricting the artist’s oeuvre, prices, ceteris paribus, increase when the artist dies. On the other hand, an untimely death may well frustrate the collectors’ hopes of owning artwork that will, as the artist’s 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 Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 49 (2011)
Issue (Month): 3 (07)
Pages: 697-715

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Handle: RePEc:bla:ecinqu:v:49:y:2011:i:3:p:697-715

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  1. Victor Ginsburgh & Sheila Weyers, 2006. "Creativity and life cycles of artists," ULB Institutional Repository 2013/99270, ULB -- Universite Libre de Bruxelles.
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Cited by:
  1. Ünsal Özdilek, 2013. "Visual autocorrelation of prices," Journal of Cultural Economics, Springer, vol. 37(2), pages 203-223, May.
  2. John Galbraith & Douglas James Hodgson, 2009. "Dimension Reduction and Model Averaging for Estimation of Artists’ Age-Valuation Profiles," CIRANO Working Papers 2009s-41, CIRANO.
  3. Christoph Safferling & Aaron Lowen, 2011. "Economics in the Kingdom of Loathing: Analysis of Virtual Market Data," Working Paper Series of the Department of Economics, University of Konstanz 2011-30, Department of Economics, University of Konstanz.

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