20 May 2007

Pricing of Artwork

(By Nalini S Malaviya)

Prices of paintings and other forms of art range from a few thousand to lakhs of Rupees and even millions of dollars (at international auctions). As an investor it is important to know what are the factors that determine the price of an artwork. Art galleries play a significant role in fixing the price of an artwork especially for new artists. For the mid-level artists, the gallery and the artist work in tandem to fix the price.
Some of the guidelines that should be considered when determining the price are - years of experience of the artist, number of shows he's had, current market rates, demand, size, quality and medium of work. For instance, similar sized works but in different mediums (pencil drawing, watercolor or oil painting) by the same artist will vary accordingly.

According to an art gallery the primary factor is the quality of the work, or at least the future promise in the quality of the work. They elaborate, “other criteria for fixing a price for a young artist depends on how "fresh" he/she is on the scene. If the artist has been working for a couple of years without any major solo exposure, but if there is already a certain maturity in his work, we can look at a slightly higher pricing than his contemporaries. If he/she is absolutely new and we need to watch in what direction the artist is going, then we tend to keep prices very affordable in order to encourage art lovers/collectors to invest/spend on the work.”
Similarly for mid rung artists pricing depends on the quality of the work and how much it is evolving - is the artist getting better and a little experimental (trying new themes, approaches, while sustaining identity) or is he/she just forging ahead on an already successful style/ theme? Prices are raised accordingly.
In fact, the gallery has absolutely no say when it comes to senior and well-established artists. Interestingly, prices do not or rather should not vary drastically from one market to another. A painting by an Indian artist should cost approximately the same in London or US. Increased connectivity has ensured greater transparency in dealing. This is also a way to check out the credibility of the art dealer.

Published in Financial Times