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A discussion of art pricing is presented, focusing on nineteenth-century British economic theory. Topics include supply and demand, art production, and value.

Byline: Werner W. Pommerehne (1,2), Lars P. Feld (3) Keywords: tertiary art markets; private and public museums' purchases Abstract: This study examines how art museums'purchasing policy influences the auction prices ofpaintings. Using a cross section of non-speculativetransactions during the period 1820--1970, we findconsiderable empirical support for the hypothesisthat public museums outside the U.S. pay above averageprices in auction markets providing higher thanaverage yields to private sellers. The typical U.S.private museums appear to be more restricted byfinancial constraints and the development of thegeneral economic conditions than their publiccounterparts. Author Affiliation: (1) University of Saarland, F.R.G. (2) University of Zurich, Switzerland (3) University of St. Gallen, Switzerland Article History: Registration Date: 09/09/2004

The recession caused art prices to fall in the early 1990s, but many auction houses report that sales in late 1993 were approaching the peak levels of the late 1980s. The art market seems to have stabilized and there is optimism for its future. Reports from specific auction houses are presented.

A study examined the economic efficiency of the art market by focusing on the auction market for modern prints. An index of prices for repeat sales of identical prints from 1977 to 1992 showed a mean real return on the total print portfolio of only 1.51%. This rate compares unfavorably with such investments as stocks and long-term bonds, which have comparable risk. Results varied on other aspects of market efficiency.

The art boom of the late 1980s has tapered off into a more realistically-priced market of the early 1990s. Most, but not all, prices are down, with people becoming more conscious of price and value. Various art dealers comment on the market.

Record prices were paid for paintings in May 1990, with a work by Vincent van Gogh selling for $82.5 million. A year later sales had dropped by 92% as prices returned to 1986-1988 levels. A examination of recent and current art markets is presented.

Rosalie Gacoigne's works that were sold in various auctions around Australia and the dramatic rise in the prices are discussed. Her record stands at 336,500 dollars, which was achieved at Sotheby's in September 2002 for Streetwise, 1986, and over the next few years her work from her earlier exhibitions have made handsome profits on their investments.

Issues are presented concerning the rising market value of paintings by Mark Rothko and the reluctance of his children to put more of his work up for sale. 200 paintings were sold to pay estate tax and 100 are retained by the family.

The fairness of the prices given to art works by African American artists may be determined by comparing their value with similar pieces in other galleries. Also, the dealer's willingness to repurchase an artwork would give an inkling to the value of the piece. The availability of data on a piece's background history could also elevate the value of an artwork. The purchasers' satisfaction with an artwork's selling price would be the final arbiter to the fairness of an artwork's valuation.