On Rosen's and Adler's Hypotheses in the Modern and Contemporary Visual Art Market

28 Pages Posted: 17 Feb 2020

See all articles by Guido Candela

Guido Candela

University of Bologna - Department of Economics

Massimiliano Castellani

University of Bologna - Department of Economics

Pierpaolo Pattitoni

University of Bologna - Department of Statistical Sciences ; University of Bologna - Rimini Center for Economic Analysis (RCEA)

F. Marta L. Di Lascio

Free University of Bozen-Bolzano - Faculty of Economics and Management

Date Written: June 1, 2015

Abstract

Using a unique hand collected dataset, comprising all artwork sales in Italy between 2006 and 2010, we test Rosen’s and Adler’s hypotheses in the modern and contemporary visual art market. We extract our measures of artist talent and fame from a set of observable artist-specific variables by means of a factor analysis and estimate the elasticities of income with respect to talent and fame. Consistent with Rosen’s and Adler’s hypotheses, our results suggest a convex relationship between income and talent and a linear relationship between income fame. Using SUR models to evaluate the effects of artist talent and fame on the average trade prices and number of sales, we find that the number of artwork sales is the main ‘channel’ through which talent and fame influence income. Copula models provide additional insights on the nature of the conditional dependence relationship between average prices and number of sales. Poolability tests suggest a single model of artist income applies to all artists in our dataset whether their works are generally traded in auction houses or galleries so it is not necessary to specify different models. Finally, quantile regressions reveal that artists in low income quantiles are not superstars, Rosen’s hypothesis holds only above the median income and fame plays no role for low income quantiles.

Keywords: Rosen’s theory, Adler’s theory, superstar, talent, fame, income

JEL Classification: Z11, C10, C30

Suggested Citation

Candela, Guido and Castellani, Massimiliano and Pattitoni, Pierpaolo and Di Lascio, F. Marta L., On Rosen's and Adler's Hypotheses in the Modern and Contemporary Visual Art Market (June 1, 2015). Empirical Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2615464

Guido Candela

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy
+39 0541 434118-9 (Phone)
+39 0541 434120 (Fax)

Massimiliano Castellani

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Pierpaolo Pattitoni (Contact Author)

University of Bologna - Department of Statistical Sciences ( email )

Via Belle Arti 41
Bologna, 40126
Italy

University of Bologna - Rimini Center for Economic Analysis (RCEA) ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

F. Marta L. Di Lascio

Free University of Bozen-Bolzano - Faculty of Economics and Management ( email )

Via Sernesi 1
39100 Bozen-Bolzano (BZ), Bozen 39100
Italy

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