Art Market Blog – Comparing the Art and Wine Markets

wine tasting11 Art Market Blog   Comparing the Art and Wine MarketsThe California Institute of Technology recently released the results of a study that they conducted into the effects of price on people’s perception of the quality and taste of a bottle of wine. Twenty volunteers were given a taste of five different wine samples which they were told were identified by their different retail prices ($5,$10,$35,$45,$90). What the volunteers didn’t know was that they only sampled three different wines, not five, and that the price they were told each bottle cost, and the actual price of the wine they were tasting, did not correspond, thus leaving each volunteer to make a judgment based on perception instead of factual information.

The results of the study were not unexpected as such but they were rather unsettling because they confirm the fact that humans can be easily fooled into thinking that something is better than it really is. According to the press release “When the subjects were told the wine cost $90 a bottle, they loved it; at $10 a bottle, not so much. In a follow-up experiment, the subjects again tasted all five wine samples, but without any price information; this time, they rated the cheapest wine as their most preferred”

I couldn’t help but see the relevance of this study to the art market where people seem to make the same assumptions regarding the quality and market value of an artwork. The problem is that there are no universally accepted standards for pricing art and no requirement for galleries or dealers to justify the price of the works they are selling therefore people automatically assume that the price that they are paying is justified and fair. As a result there is also the assumption that the price of is an indication of how good a work is and how “valuable” a work is.

With prices going through the roof I think that it is extremely important for everyone to be very wary of the prices being paid and to educate a many people as possible on the methods of valuing art and the factors that determine value.

 Art Market Blog   Comparing the Art and Wine Markets**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

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  • http://www.tinyurl.com/381htn Debra Bretton Robinson

    A gallery owner in Boston told me once, “if you have a history of selling your work in the price tag you want to put on a piece, then you can put that price on it.” I never sold a thing at that gallery. Personally, I think my prices were too low and viewers didn’t value my work enough to want to buy anything. Over the years, I have had to raise my prices on my own to keep up with my experience level and inflation. Sometimes I find myself at an Open Studio and everyone there tells me that no one ever buys something over a certain price. If someone actually did sell a piece at the “top”, they were the talk of the art community! So unfortunately, I have reduced my regular prices and do what “the proverbial romans do” while I am there just to make sales. I am also constantly kicking my friend Noredin Morgan to raise his prices because we often show our work together. If his prices are very much under mine, either our viewers won’t take us seriously or they might buy some of his work just because it looks like such a bargain compared to mine! Pricing work is never an easy process.

  • saul

    Thanks for the story, nick. It is a perfect illustration of people’s insecurity and mistrust of their own taste when faced with a competing opinion from an “authority figure”, in this case the anonymous force that figures out what a wine should cost.
    that flock mentality goes far in explaining the big discrepancy between an artist’s reputation during his lifetime, and generations after his death. remember, rembrandt, vermeer, cezanne, van gogh, zubaran, rothko, gorky, cornell all died in varying degrees of obscurity/ penury/ underrecognization. and who, now, even remembers the british and french academics, at all? they were the koons/warhol/hirst’s of their day.

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    Thank you so much for this tremendous resource! I belong to Redbubble and have just joined Artmesh. I can attest to the tremendous creative energy and the level of talent on both sites. I plan to check out the others, as well. I have also had excellent experiences with AbsoluteArts/Worldwide Art Resources. I have been with them for several years.

  • bluerabbit

    Yes, I agree. As an artist, I have long struggled with pricing. I am also a freelance writer. When I work for a client, we agree on how much I will be paid before I begin the job. There is an established price range for a certain type of work, and I do not delude myself by thinking that I am the only one with the necessary skills required.
    My paintings are different. I do them as part of a personal need, a spiritual journey. Before I started painting, I was starved for silence.
    How do you charge for that? I was very grateful for the services of dealers when I was living in Los Angeles. Now I live in a small Colorado city.I am much happier and a much better painter, but there are no appropriate dealers nearby. I decided to raise the prices for my originals substantially because, if I sold a picture for a few hundred dollars, it would take some of my writing time to stretch it and take it to the shipper. I would have shipping costs. Then, I would not have an irreplaceable part of my life anymore. What is that worth? Well, I asked myself, which would be worse, to sell the picture for too little or not to sell it at all. I decided that, for now, it would be better not to sell it at all. That’s what value is, really. Would my pictures be worth what I am charging to others? Art is such a matter of personal taste. What one person adores, another sees as kitch. I think that the real value of a piece of art lies in what it says to you. When I first started painting, I sold an acrylic of an ice cream shop on Stearn’s Wharf in Santa Barbara to a woman I met in a group. She paid me a $100, but, for her, that was a fortune. I asked her why she wanted it. She said she was diabetic and could not eat ice cream. Another one of my early paintings was a gift to a friend, the wife of a director. It is one of the reasons I paint. The picture showed two women on the beach. One was lying in the sand and the other had been, but was starting to stand up. I did it from a little sketch. She was dying of cancer. She told me that, as she looked at that picture, she saw a person rising and stepping away…

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  • http://www.wijnenwijn.nl Erik

    I agree totally and i don’t thinks this works only for wine or art. this works for almost any product. art, wine, food, shoes, computers etc.

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