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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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Suggested Citation

  • 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, July.
  • Handle: RePEc:bla:ecinqu:v:49:y:2011:i:3:p:697-715
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    Cited by:

    1. Ünsal Özdilek, 2013. "Visual autocorrelation of prices," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 37(2), pages 203-223, May.
    2. Federico Etro & Elena Stepanova, 2015. "The Market for Paintings in Paris between Rococo and Romanticism," Kyklos, Wiley Blackwell, vol. 68(1), pages 28-50, February.
    3. Galbraith, John W. & Hodgson, Douglas J., 2012. "Dimension reduction and model averaging for estimation of artists' age-valuation profiles," European Economic Review, Elsevier, vol. 56(3), pages 422-435.
    4. Federico Etro & Elena Stepanova, 2017. "Art collections and taste in the Spanish Siglo de Oro," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 41(3), pages 309-335, August.
    5. José Manuel Pastor & José Manuel Pavía & Lorenzo Serrano & Emili Tortosa-Ausina, 2016. "Rich regions, poor regions and bank branch deregulation in Spain," Working Papers 2016/02, Economics Department, Universitat Jaume I, Castellón (Spain).
    6. Leif Brandes & Stephan Nüesch & Egon Franck, 2016. "Death-related publicity as informational advertising: evidence from the music industry," Marketing Letters, Springer, vol. 27(1), pages 143-157, March.
    7. Kim Oosterlinck & Anne-Sophie Radermecker, 2018. "The Master of …”: Creating Names for Art History and the Art Market," Working Papers CEB 18-007, ULB -- Universite Libre de Bruxelles.
    8. Francesco Angelini & Massimiliano Castellani, 2017. "Cultural and economic value: A (p)review," Working Paper series 17-10, Rimini Centre for Economic Analysis, revised Jan 2018.
    9. Park, Heungju & Ju, Lan & Liang, Tianyu & Tu, Zhiyong, 2017. "Horizon analysis of art investments: Evidence from the Chinese market," Pacific-Basin Finance Journal, Elsevier, vol. 41(C), pages 17-25.
    10. 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.
    11. Guido Candela & Massimiliano Castellani & Pierpaolo Pattitoni & F. Marta L. Lascio, 2016. "On Rosen’s and Adler’s hypotheses in the modern and contemporary visual art market," Empirical Economics, Springer, vol. 51(1), pages 415-437, August.

    More about this item

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • 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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