Art, Art Market and their prices (Annotated Bibliography Sample)

ANNOTATED BIBLIOGRAPHY, ART, ART MARKET AND THEIR PRICES Name Course Tutor Date INTRODUCTION In almost everything done in the universe, art normally defines and contributes either in a small manner or in an immense manner to illustrate and stem out its importance. According to Shelley (2003), art plays a crucial role in making our lives very rich. A world without art could be unimaginable to say the least. Majority of the forms in the 21st century are driven by art. Art is seen to stimulate our brain in different ways in some situations we may be laughing while in others it may trigger riots. Art is very essential especially when it comes to creativity and a form of self-expression. Really to just say the least, art is quite important and essential in our day to day lives. The functionality and importance of art is seen in our daily lives and it would be impossible for anyone to go about their lives without appreciating art and its effects. To just try and sum up the many different ways in which art is perceived, it is said to be form and content. Through saying this, it basically implies that art mainly consists of only two things that is the form and content. By putting art as a form implies the physicality of the materials utilized, the design principles which are employed and the various elements which art usually has. Content is slightly trickier since it is idea based. Content illustrates what the artist tries to put across and the reaction elicited from the artists message passed across. This research paper seeks to understand what art really is and also try and evaluate the art market and the pricing on pictures and paintings. It will utilize research materials from different scholars who have addressed art and the pricing they have had to contend with. It will illustrate the pricing of art as well as the art of pricing. It will then conduct a hypothesis on the art market and their pricing. A review of the art market Art is said to have a market where the paintings and pictures are held and sold and displayed in the form of a gallery. The primary art market basically is a gallery or exhibition where the artwork is displayed in the market for the first time and the price is also set for the first time. At this juncture, similar to those who make designer products, the dealer together with the artist come up with a selling price. This selling price factors in research and development as well as product creation. The pricing of an artwork such as a painting, picture or photograph follows the same law used in economics of supply and demand. When some work of an artist has huge demand, the value of the artwork as well as the price increase. Generally, higher demand would result to higher prices for the artwork in the primary market. Upon sale of the artwork by a purchaser, collector or dealer, it now enters the secondary market. Majority of the artworks in auction usually comprise the secondary market since the artwork has previously been purchased. Beckert & Rossel (2013) try to question immensely how really the price of an artwork is arrived at. They allege that those buyers of contemporary art usually encounter a problem geared around uncertainty since what can be categorized as quality is usually hard to determine. Buyers are usually left with an uphill task of trying to estimate how a particular piece of art will perform as an investment. A market for contemporary art usually holds the possibility of rational purchasing decisions being limited. An artwork's value usually stems from a process of assessment by the various experts in the field of art e.g gallery owners, curators and the collectors. They aid in establishment of an artistic reputation of a work or a particular artist. The signals which emerge from the field aid the buyers in assessment of the economic value attached to art. This hypothesis was tested on two datasets which contained data on art prices and the information from artist's biographies. Empirical findings in the art market Contemporary art market has already been seen to be drawing controversy especially centering around the monetary valuation of art works. The main critics of commercialization of the art usually argue over the influence of the sponsors while also lamenting on how low some incomes the artists usually make. (Velthuis, 2005) The Marxist theorists use the art market as evidence as to how culture is commoditized and show how a price tag could trivializes the unique values which art seems to bring out. Other scholars assert that the market and art are two hostile worlds which are opposed to each other. (Bourdieu 1999; Zelizer 2000). The art market poses different challenges not only the collision between sacred values and monetary compensation. For instance, in economics the classical economists Adam Smith and Alfred Marshall interacted with art when developing theories centered around value and price formation. (Velthius, 2005). Although art economics has been established as a specialization in economics, titles as "pricing" and "priceless" stand as evidence as to challenges posed by the art market to economic theory. Therefore we find that the art market is deeply entrenched in various other issues all of which in one way or another contribute immensely to the pricing mechanisms which are employed. The next section will lay emphasis on the hypothesis employed. The hypothesis is tested in an effort to show connectedness between the pricing of artwork and the market in which they are positioned. Hypothesis testing Based on the data presented above, two hypothesis were tested and which were drawn from the discussion. H1: The works of artists with better access to institutions having strong reputations in the art market realize higher prices in the primary galleries as well as the secondary auction markets. H2: The empirical relationship existent between the reputation of artists and the prices of artworks differ between the primary and secondary markets. The primary art market holds a more gradual development of prices on the progress of an artist's career. The secondary market calls for a stronger impact of actual reputational indicators For proper testing of the hypothesis empirically, datasets from artists were compiled which contained information on prices paid for art works by individuals (dependent variable). Data was also compiled directly measuring the access which artists had to the institutions of the market for art which conferred reputation. This signaled quality to the purchasers and hence explained the price formation in the art market (independent variables). We were able to assess the reputations held by these institutions and a distinction was made on the assumed effects in the secondary as well as primary markets. To do this, we had to build two datasets termed as auction price data and gallery data. The database from the secondary (auction market) comprised data on 23 internationally renowned artists who hailed from German speaking countries. These individuals pursued activities in the art world from commencement of their careers to 2000. This data also factored prices of over 1,000 wo...