Artsy discusses the art of pricing art.
Here’s an excerpt highlighting differences between the ways galleries and auctions price art.
It is suggested that collector’s, including perhaps especially those that work in the financial industries, not treat art like a financial investment.
Galleries price works according to the size of the work, the success of the most recent show, and any other relevant career-related variables, such as a recent institutional show or a nomination for an award, said Bowling, who spent seven years at Andrea Rosen Gallery before joining Phillips. In addition, galleries try to keep the prices for their artists on a steady upward trajectory, rather than riding the highs and lows of the broader art market as auction prices more often do. By contrast, auction estimates usually account for buyers’ tastes and appetites, as well as where the art market is in its cycle. “I have to think about many people it will appeal to, how many bidders, how that competition is going to drive up the price, and base my estimate range on that,” she said.
While Bowling describes herself as “the biggest proponent of the gallery system,” she said the straightforward nature of auction pricing can be a great entry point for new collectors. “I think there’s something appealing about the auction environment,” she said. “Here’s the estimate range, we have an auction, and people bid against each other. That’s how the price is achieved.”
Bowling, Campbell, and Levin all stressed one thing: Collectors shouldn’t treat art like a financial investment. (That’s even, and perhaps especially, the case for those who work in financial services, who often cite headlines of multi-million-dollar prices achieved at auction.)
See: “The New Collector’s Guide to Understanding Art Pricing” | by Anna Louie Sussman, Artsy, 3 April 2017
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