The Market for Paintings in the Netherlands during the Seventeenth Century

We analyze the price of paintings in Dutch inventories and auctions of the Golden Age. The econometric investigation emphasizes correlations between prices adjusted for inflation and characteristics of the paintings, of the painters, of the owners (job, religion, size of the house) and, in case of auctions, also of the buyers. Price differentials for alternative genres, for the characteristics of the traders and the purpose of the inventory tend to disappear after con-trolling for the unobservable quality of paintings with artists fixed effects. The real price of a representative painting declined over the XVII century. We argue that initial high prices were the fruit of the large increase in demand by the Dutch middle class, which attracted endogenous entry of painters. This led to intense competition and the development of cost-saving innovations for mass production (high specialization in genres, smaller paintings, monochromatic styles) so as to gradually reduce prices. We also run a multinomial probit model to verify the Montias hypothesis on the location of paintings between rooms of Dutch houses.