Economic Analysis of the Droit De Suite - the Artist's Resale Royalty

13 Pages Posted: 27 Oct 2003

See all articles by Jon D. Stanford

Jon D. Stanford

University of Queensland - School of Economics

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 skeptical 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.

Suggested Citation

Stanford, Jon D., Economic Analysis of the Droit De Suite - the Artist's Resale Royalty. Available at SSRN: https://ssrn.com/abstract=461803

Jon D. Stanford (Contact Author)

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
28
Abstract Views
2,914
PlumX Metrics