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

 

JULY 28, 2011 Thursday

For Successful Artists, It Matters When You Die

If successful artists die before the age of about 71 or 72, their paintings and drawings lose value upon their deaths, a reflection of the market's disappointment that no more potentially valuable works will be forthcoming from them. But if they die after that age, their works rise in price, because the disappointment is outweighed by the perception that scarcity will make their oeuvres more valuable. This "death effect" reaches a maximum for deaths at 83 to 88 years and amounts to 5% to 10%, say Heinrich W. Ursprung of the University of Konstanz in Germany and consultant Christian Wiermann.

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