Snobbery and the Art Market – artmarketblog.com
A few posts ago I wrote about art and the Veblen Effect. The Veblen Effect suggests that the demand for certain goods, such as art, decreases as the price decreases because a more expensive object is associated with greater prestige and greater wealth. Another effect called the snob effect suggests that the demand for certain goods decreases as the number of people who own one of that particular good increases. In other words, the lower the number of people who own a particular good, the greater the desirability of that good. The reason that this is often the case is because people tend to associate an object of very limited availability with social and financial status, prestige and exclusivity. The fewer the people who own or can own a particular object the more exclusive and prestigious that object is perceived to be. Just like the Veblen Effect, the snob effect is especially relevant to art and the art market.
I could have used the work of Damien Hirst as an example of the snob effect but having used Hirst as an example of the Veblen Effect and not wanting to sound like a broken record I will use Warhol as an example instead. There have been several claims over the years that the Warhol Foundation have intentionally denied the authenticity of works submitted to them for authentication that were in fact genuine in order to reduce the number of Warhol works on the market thus increasing the desirability of those works that are available. The Warhol Foundation ensured that the works they deemed to be fakes would not be passed off as genuine by stamping the word Denied on back of the works. Although the claims of market manipulation have yet to be proven the fact that the claims have been made is proof that the snob effect is applicable to art and the art market.
Funnily enough, both Hirst and Warhol have harmed the market for particular series of their work by adding works to a particular series or producing further works very similar to those from a particular series after that series was seemingly finished. In some ways, this is like an artist producing a print with an unlimited print run. The desirability of that print would decrease as the number of people who purchase one of those prints increases. The moral of the story is be wary of prolific artists who produce large numbers of works that are very similar. Also be wary of artists who tend to re-use particular themes, ideas or series of works.
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.