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Economic Analysis Of The Droit De Suite- The Artist's Resale Royalty

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  • J. D. Stanford

Abstract

Interest in the Droit de Suite, the artist's resale royalty, has been re-kindled by the decision of the European Union to introduce such a scheme to apply from 2006. The general nature of the Droit de Suite as an extension of copyright is discussed. The specific proposals for a Droit de Suite in Australia are analysed. Economic arguments support the sceptical view of the Droit de Suite. It is argued that the introduction of the Droit de Suite would be predicted to reduce sales of new paintings, that selling activity would move to jurisdictions which do not have a Droit de Suite and that artists would prefer to alienate their Droit de Suite by sale of a painting. The economic analysis is supplemented by an empirical study of art auction prices of 72 artists in Australia over the period 1973-1989 which reveals that the works few artists achieve a capital gain on sale in the secondary market re-inforcing the view that, if implemented, a Droit de Suite would provide payments to only a small number of artists who are likely to be in good economic circumstances. The burden of the Droit de Suite is shown to fall on the collector when selling paintings. The effect of the imposition of the Droit de Suite will be to lower the gain to collectors of paintings. It is concluded that the Australian proposal for the Droit de Suite is based on an inadequate analysis of the art market and would require a registration procedure for art works incurring heavy costs in relation to the funds available for distribution. Copyright Blackwell Publishing Ltd/University of Adelaide and Flinders University of South Australia 2003.

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  • J. D. Stanford, 2003. "Economic Analysis Of The Droit De Suite- The Artist's Resale Royalty," Australian Economic Papers, Wiley Blackwell, vol. 42(4), pages 386-398, December.
  • Handle: RePEc:bla:ausecp:v:42:y:2003:i:4:p:386-398
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    References listed on IDEAS

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    1. Michael F. Bryan, 1985. "Beauty and the bulls: the investment characteristics of paintings," Economic Review, Federal Reserve Bank of Cleveland, issue Q I, pages 2-10.
    2. MacDonald, Glenn M, 1988. "The Economics of Rising Stars," American Economic Review, American Economic Association, vol. 78(1), pages 155-166, March.
    3. Karp, Larry S. & Perloff, Jeffery M., 1993. "Legal requirements that artists receive resale royalties," International Review of Law and Economics, Elsevier, vol. 13(2), pages 163-177, June.
    4. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-858, December.
    5. Templeman, Sydney, 1998. "Intellectual Property," Journal of International Economic Law, Oxford University Press, vol. 1(4), pages 603-606, December.
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    Cited by:

    1. Robynne Quiggin & John Quiggin, 2007. "Intellectual Property and Indigenous Culture," Australian Public Policy Program Working Papers WPP07_1, Risk and Sustainable Management Group, University of Queensland.
    2. Richard Watt (ed.), 2014. "Handbook on the Economics of Copyright," Books, Edward Elgar Publishing, number 14240.
    3. Richard Watt, 2014. "Copyright in visual art markets: some economic theory concerning resale royalties and other options," Chapters,in: Handbook on the Economics of Copyright, chapter 18, pages 328-342 Edward Elgar Publishing.

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