Wed, Nov 22, 2006 - Page 9 News List

An economist's theory on the value of art

David Galenson has brought statistics and cold mathematics into the art world, and some are not liking what he has found

By David Leonhardt  /  NY TIMES NEWS SERVICE

By the time the crowd began arriving in Rockefeller Center on Nov. 8 for the big auction at Christie's, rain had already been falling in New York for 19 consecutive hours. It was one of those blustery rains for which umbrellas were no match, so the assembled art lovers were left to peel off their damp overcoats in Christie's lobby and wait in a long coat-check line.

Once inside, a few hundred of the well-appointed attendees were shunted off to one of two side rooms, where they would watch the auction on a video screen, because the 750 seats in the the James Christie Room weren't nearly enough for the crowd.

Yet none of the inconveniences seemed to dull anybody's enthusiasm. Over the next three hours, a mere sketch by Mondrian sold for US$3 million, while a Gauguin painting went for US$40 million and a Klimt for US$88 million. In all, the auction brought in US$491 million, breaking the modern mark of US$435 million set by Sotheby's in 1990, in the last bull market in art.

There is no mystery about the causes of the new boom. The rich have done very well over the last decade and some of them, including hedge fund managers like Steven Cohen, are spending large sums of their money on art. New billionaires in China, India and, above all, Russia, have also entered the market.

The mysterious part of the current mania lies in figuring out what exactly makes a piece of art worth US$30 million instead of, say, US$1 million. Not even people who make their living selling art claim to have much of a definition of great art. In fact, they take pride in not having one.

"That's where the market becomes magical," Tobias Meyer, Sotheby's chief auctioneer, said.

For the last five years, though, a man named David Galenson, an art lover, modest collector and tenured professor of economics at the University of Chicago, has been trying to change this. He has developed something approaching a unified theory of art, which hasn't won him many fans in the art world but does a surprisingly good job of explaining the relative value of the world's great paintings. Even if you know nothing about art, Galenson can help you understand why Andy Warhol's 1962 Orange Marilyn is expected to sell for more than his 1972 Mao at Christie's postwar auction.

The theory has its roots in a conversation a decade ago between Galenson and an art dealer he knew. He was thinking about buying an old painting by a US artist named Sol LeWitt and asked the dealer what she thought of the price. She told him the work was overpriced, because recent LeWitt works were selling for less. When Galenson asked her if the comparison was relevant, she told him that an artist's age didn't determine the price of his work.

"My whole life I've studied the relationship between age and productivity," Galenson, a slight 55-year-old, said last week before the Christie's auction. "And she's saying it doesn't matter."

So he began collecting data on the sale price of works by Warhol, Jackson Pollock and other US artists and he discovered a pattern. Most of them produced their most valuable work either very early in their career, like Warhol, or very late, like Pollock. When he expanded his research to European painters, he found the same pattern.

Not only that, but the two groups tended to approach art, and to talk about it, in strikingly different ways. The young geniuses, like Gauguin, Picasso and Van Gogh were conceptual innovators whose paintings broke sharply from previous work. They typically had a precise goal in mind when they started a piece and didn't need long to finish it.

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