Art Wealth Management by Alessia Zorloni

Author:Alessia Zorloni
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

(Constant)

−9179327.062

1578976.32

Artfacts score

526.766**

121.48

0.214

Change in visibility

−5313.547*

2249.070

−0.104

N. Lots sold

53637.405**

8126.964

0.323

Top sale

1.650**

0.143

0.553

N. of osserv. (N)

155 (4)

F statistic (df)

0.000

R-squared

0.860

Adj R-squared

0.739

Data sources: Artfacts.net and Artprice.com

Notes: VIF < 1.40;*p < 0.005; **p < 0.01

The last data analysis pertains to the relationship between financial success and cultural success. Single regression (OLS) between turnover (used as a proxy for financial success) and the Artfacts score or notoriety (used as a proxy for cultural success) shows a strong cubic relationship (R square = 0.63; Sig. F = 0.00); the more notoriety increases, the more turnover increases in a cubical way. Even excluding the five outliers in the dataset, the results do not significantly change and the relation stays cubical. Thus, cultural success, determined by notoriety, strongly increases financial success (HP3). The scatterplot makes clear that some artists are overvalued and others are undervalued (the straight lines in the graph are median values for financial success and cultural success). The overvalued contemporary artists are in the upper left quadrant: they have high financial success but low cultural success with respect to the first half of artists taken into consideration in this study. Some examples are Enrico Castellani and Agostino Bonalumi. The undervalued artists are in the lower right quadrant: they have high cultural success but low financial success. Some very visible artists, such as Sol LeWitt, Marcel Broodthaers, Thomas Ruff, and Marcel Duchamp, who do not have huge turnover, should have had a higher value on the basis of the preferences expressed by cultural institutions. These artists, together with many others, may represent a very good investment opportunity for the future. Nevertheless, it is necessary to point out that the majority of the artists placed in the lower right quadrant belong to younger generations with respect to those lying in the upper right quadrant. This may explain lower market quotations. If fame, notoriety, or even the simple interest of public institutions, dealers, museum directors and curators—here all included in the score that the artists received from Artfacts—proves a good indicator, some artists may have more interesting performances in the coming years. On the contrary, those artists who were valued more than would be expected on the basis of the interest expressed by the critics (that is to say, positioning in the upper left quadrant) may start declining in the future or, in any case, enjoy weaker revaluations with respect to those in the lower right quadrant. Nevertheless, it is worth noting that, in the contemporary art market, aesthetic value and subsequent monetary value is greatly influenced by temporary fashions. This is due to the fact that historians and operators in this market have not yet been able to establish what is valuable and will last in the future (Fig. 2).

Fig. 2Cultural success and financial success matrix, 2011. Data sources: Artfacts.net and Artprice.com

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