Reputation, Price, and Death: An Empirical Analysis of Art Price Formation
AbstractWe 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 InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2237.
Date of creation: 2008
Date of revision:
art price formation; death effect; durable goods monopoly;
Other versions of this item:
- Heinrich W. Ursprung & Christian Wiermann, 2011. "Reputation, Price, And Death: An Empirical Analysis Of Art Price Formation," Economic Inquiry, Western Economic Association International, vol. 49(3), pages 697-715, 07.
- 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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