Primer:

PRICING ART: WHO DECIDES?

From gallerists to artists and auctioneers, many different people factor into deciding an artwork's final price.

Though the news cycle tends to highlight record-setting auction prices, art’s monetary value runs the gamut. Pieces can sell for a few hundred dollars or a few hundred million dollars, but how an individual work figures into that spectrum can appear mysterious. Placing a monetary value on creative output–not to mention the thought and skill that goes into it–isn’t simple, but there are a few key factors that usually make it into the equation.

One of the most fundamental elements to consider is whether a work is being sold on the primary or secondary art market. The primary art market deals in new works of art while the secondary art market consists of works with more than one previous sale. Having a sales record is a sign of consistent or growing interest in an artist's work, which can serve to increase the value of their art. But that doesn’t necessarily mean prices for art on the primary market are lower, since other considerations can have an impact, too.

An artist’s reputation–something often cultivated by the gallery representing them–can be an extremely influential factor in determining price. The world-famous artist Yayoi Kusama's continued relevance, coupled with a career that spans six decades, ensures prices will be high for both new and older works. How much, if at all, an artist has been exhibited or included in permanent museum collections is also a consideration when an artwork is being sold.

For artists who are no longer living, the supply of art is inherently finite. If a deceased artist was also especially influential, their influence and the limited supply make each work more valuable. A posthumous examination of an artist’s work can aid in identifying career signatures or periods of particular creative strength. This can make certain works by the same artist worth significantly more than others.

The materials and scale of an artwork also can’t be ignored when determining its price. Monumental metal sculptures by the likes of Jeff Koons take a considerable sum to fabricate and significant means to transport. Likewise, the choice of material impacts art value even in more reasonably-sized works like oil paintings on canvas, which usually go for more than works on paper.

But the question remains: who decides art’s value? Ultimately, no one person makes that call. Instead, an artwork's price is based on the collective decisions of many art professionals, such as appraisers, gallerists, art dealers, auctioneers and collectors.

Art's value is never static. Just like the value of anything else, prices rise and fall according to demand, scarcity, the fluctuations of taste and an artist’s visibility as their art is seen and experienced around the world. Sometimes, prices are more arbitrary when an artist or group of artists becomes part of a speculative bubble. In the end, while price is always an important consideration, the most important thing is to buy something you love.