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

Heinrich Ursprung and Christian Wiermann

No 2237, CESifo Working Paper Series from CESifo

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

Keywords: art price formation; death effect; durable goods monopoly (search for similar items in EconPapers)
JEL-codes: G12 J24 Z11 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: REPUTATION, PRICE, AND DEATH: AN EMPIRICAL ANALYSIS OF ART PRICE FORMATION (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2237

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