How Do We Calculate the Value of Art?

Ormond Gigli, "Girls in the Windows", chromogenic print, 1960. Estimated value is $14,000 to $18,000. Courtesy of Swann Galleries.

How do we calculate the value of art? This is a question so often considered by today’s working artists, gallerists, and collectors, but the answer is rarely simple.

This summer, for example, Ugo Rondinone produced I❤️John Giorno, a multimedia exhibit celebrating the wide-ranging influence of his partner, the poet and artist John Giorno. Shown across 13 different venues in New York City, this ambitious retrospective included painting, video, photography, and performance. One of the most striking examples was an installation at Hunter College’s Hudson Gallery, entitled “John Giorno and Tibetan Buddhism.”  On view is Giorno’s personal shrine, an assemblage of feathers, photographs, and figurines.

The intrinsic and monetary value of this artifact is almost incalculable; Giorno’s influence extends over 60 years. But for today’s working artists, gallerists, and collectors, this is exactly what they must calculate: What is the value of the work? What is the price tag assigned to this painting, this sculpture or this video installation? Do market forces outside of the art world come into play?

Calculating the Value of Art in Time and Materials

It could be argued that one of the simplest ways to begin to answer these questions – for the artist, at least –   is to calculate the real cost of producing their works by tallying the costs of materials and labor. How much time is spent drafting, planning and creating the work? What is the artist’s hourly rate? What expenses were incurred? Tools such as paint, brushes, canvases, and studio rent should all be factored in.  Alan Bamberger, an art consultant and gallerist since 1980, says that artists should determine these costs first when evaluating the value of art. “At the most fundamental level, you should be able to make a fact-based case for what your art is worth, in a way that ordinary, everyday people who may be interested in your art can understand,” he says. There is definitely a market for the legion of small galleries across the country-  and the artists who show there– to sell their work when the buyer or collector thinks the price is fair, and quite frankly, they love it.

Camilla Fallon has a Masters of Fine Arts in painting from Yale University and has exhibited her work at The National Arts Club in New York City, as well as galleries in Brooklyn including Seeking Space, Arts in Bushwick and Surface 3, Arena Gallery.  In her experience, “Artists usually assign the value of art according to size. I sell mostly small work, rarely a large piece. I used to sell through a dealer, but she stopped doing business, so I’ve been doing most of the selling myself over social media and in some cases, to collectors I already knew,” says Fallon. “I do try to find out what other artists charge. Dealers usually set the prices. I hate the thought of having to split 50-50 with them, unless they mark it up. However, I’m often afraid if they mark it up too much it won’t sell.”

Fallon also notes that contradictory to other artists, she rarely considers the cost of materials when assigning value to art. “I never consider the cost of materials. For me it’s pretty standard, especially if it’s small, it doesn’t cost a lot to make. Most of the time I absorb the shipping costs.”

Certainly, the rules are a bit different for high- priced contemporary art. In an article on Quartz, Allison Shrager claims that, at the opposite end of the spectrum, well-known “Collectors and galleries prefer provocative work” –work that pushes boundaries, or radical experiments in form, that might prove too risky to exhibit in a local gallery outside of New York City. Artists like Damien Hirst, one of the highest-earning contemporary who notoriously preserved dead animals (including a shark, a sheep and a cow) in formaldehyde,  is definitely provocative and speaks to Shrager’s point.

Others take an approach that considers the totality of factors that can be attributed to what makes an artwork valuable, including relevant details about the artist’s work history and the artwork’s availability or uniqueness. Daile Kaplan is the Vice President and Director of Photographs & Photobooks, and an auctioneer at Swann Galleries.  In addition, Kaplan appears regularly as a photographs specialist on PBS’s popular television program Antiques Roadshow, and has also appeared as a commentator on photographic images on The History Channel, HGTV and The Discovery Channel. This is her well-informed take on how professional determine the value of art in that world:

“Collecting fine art, documentary and vernacular photographs or photobooks means making particular aesthetic and financial choices. In my opinion, artworks (including out-of-print photobooks) are “objects,” not “products” and, as such, should be viewed differently than consumables.”

According to Kaplan, “the value of art is determined by many factors, including an artist’s reputation or standing, the popularity of the image or object, its prior sales record at auction or in the retail environment, its size, condition, and signature, and, in the case of photography, whether it’s a  vintage or modern print, a multiple (or editioned) work, or a posthumous printing,” she notes. “In addition, the lineage or provenance associated with the work is important, and whether the work has been in a museum exhibition and was reproduced in books, catalogs or monographs will also influence the value of art.”

Art as a Commodity

Kaplan concludes her discussion on the market value of art by speaking to its function as a commodity in financial markets, as well as, paradoxically, an object with an  intrinsic, almost intangible value:

“In today’s culture, there’s a lot of media coverage about whether art is a good investment. But it’s always best to purchase a photograph or painting because you like it. I’ve discovered that the best collectors are intellectually curious and insistent on educating themselves,” she says, and adds, “Collecting art should be a thrilling experience. When I was a young kid, my elementary school teacher took the class to the World’s Fair, where we viewed the Pieta. The sculpture was beautifully lit and displayed before a remarkable cobalt blue background. I was stunned, and suddenly realized the world was filled with other beautiful objects–all I had to do was find them.”

However, according to Kaplan, there’s been a new twist in the value of art in this market. “Increasingly, the art world is seeing traders and brokers from the equities market purchase classical and contemporary photographs. When these collectors set out to purchase a photograph, they employ criteria that is generally data-driven. In other words, how have pictures by this same figure performed overall in the marketplace? How strong is the artist’s brand? Are their prices going up?” she notes. “Over time, other  considerations come into play: the originality of the artist’s style, a deeper awareness of how  subject matter references personal experiences, and what is sometimes characterized as the “knock-out value” of the art itself: How it is executed and reveals itself.”

Like Bamberger’s earlier assertion, artists as well as gallerists and curators, whether in a local gallery or the rarified world of high priced contemporary art– must make a fact-based, data-driven case for the price tag they affix to the work. This is true for an artist like Fallon who has, over the years, carefully cultivated collectors for her work. And it is true for a world-renowned African American artist like Hughie Lee-Smith, whose work was recently auctioned at Swann Galleries. Yet, there are other intangibles that come into play as well. In the end, art is not a product, like a piece of property or jewelry, but an object that offers a new way of seeing the world. And if the vision is radical enough it moves onto the world stage, it is priced accordingly.


by Lillian Slugocki
October 11, 2017

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