Reputation, Price, and Death: An Empirical Analysis of Art Price Formation

19 Pages Posted: 17 Feb 2020

See all articles by Heinrich W. Ursprung

Heinrich W. Ursprung

affiliation not provided to SSRN

Christian Wiermann

affiliation not provided to SSRN

Date Written: July 2011

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 dataset which exceeds the sample size of traditional studies in cultural economics by an order of magnitude.

JEL Classification: Z11, J24, G12

Suggested Citation

Ursprung, Heinrich W. and Wiermann, Christian, Reputation, Price, and Death: An Empirical Analysis of Art Price Formation (July 2011). Economic Inquiry, Vol. 49, Issue 3, pp. 697-715, 2011, Available at SSRN: https://ssrn.com/abstract=1874499 or http://dx.doi.org/10.1111/j.1465-7295.2009.00279.x

Heinrich W. Ursprung (Contact Author)

affiliation not provided to SSRN

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Christian Wiermann

affiliation not provided to SSRN

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