Art Prices, Disparities, and Cultural Leadership

(disponible en anglais seulement)

[VERSION EN PRÉPUBLICATION]

Rachel A. J. Pownall

Rachel Pownall is a Professor of Arts and Finance at the School of Business and Economics at Maastricht University in The Netherlands. Head of the Finance Depart­ment and Director of the Executive Master in Cultural Leadership, an accredited Master of Arts, she pioneered and developed together with the Royal Academy of Arts in London in 2017.

ABSTRACT
This article explores the development and dynamics of investment in the arts, focusing on how persistent disparities in income and wealth lead to changes in art auction sales prices. The article sets out a framework which provides guidance for cultural leaders as a response to observed disparities in the art market. Using auction sales data collected from auction house catalogues and from Artnet, from 1909 until 2025, the analysis first reveals observational evidence of disparities in the art market. Secondly, building upon scholarship in the field of cultural economics and art investment, develops a theoretical model where changing income and wealth inequality mechanically amplify art price movements, generating both booms and fragility in art market cycles. Using long-run art market indices, I find empirical support for the model. Demand for art is concentrated among the ultra-wealthy and results show that levels and changes in income and wealth inequality are associated with subsequent changes in long-run repeat sales art price indices in the United States and the United Kingdom. Thirdly, the results provide a guiding framework for cultural leadership − a term I define − as a response to addressing art market disparities as a risk management tool for arts management.

KEYWORDS
Art markets; art finance; arts investment; arts management; auctions; cultural economics; cultural leadership; cultural production; disparity; inequality; platformization.


https://doi.org/10.59876/b-ek3g-gxdf