Book Review: The Worth of Art

The Worth of Art, Arturo Cifuentes and Ventura Charlin (2023). New York: Columbia University Press.

In The Worth of Art, authors Arturo Cifuentes and Ventura Charlin provide an economic interpretation of the art market, using regressions and financial analysis to investigate market dynamics while integrating aesthetic characteristics of artworks. Early on, they make the following argument: “this book is based on the premise that the use of financial tools, combined with empirical evidence provided by prices paid for artworks, can offer valuable insights about those works—and the art markets—from an investment as well as an aesthetic viewpoint” (4).

This reader remained unconvinced that the authors’ analysis provides insights into the aesthetic character of artworks, yet they are pioneering in their efforts to integrate aesthetic dimensions into pricing analyses. In the end, Cifuentes and Charlin’s perspective on the art market is unique and informed; they clearly are passionate about art, expressing this passion through equations. The good news, for those of us who are not statisticians, is that their language is clear, and their descriptions of the ensuing results are well balanced. Furthermore, the authors provide a very generous and explicit “Appendix for Poets” in which they decode their three main tools: linear regressions, Monte Carlo simulations, and statistically significant outcomes.

The field of cultural economics is well developed, but the analysis of the art market is not as robust as one might imagine. To put it simply, there are sociological and economic models for analyzing the art market, and the authors unmistakably favor the tools of the latter. Moreover, the book appears to seek an audience among art collectors, providing much advice on what can be learned with such techniques and what cannot. Cifuentes and Charlin clearly value discernment over mechanistic models; they aim to provide realistic estimates of what data can tell us about the art market and its limitations. Rather than divulge the secrets that every investor wants to know, the authors convey what information becomes useful and how, instead of portraying statistical analysis as a means to solve the problem of what art a collector should invest in.

Cifuentes and Charlin cover the common models for estimating returns on investments in artworks. Return sales and the hedonic model are the most common of these, to which they add the capital asset pricing model—which they find lacking—as well as an innovate metric about the size of artworks, the “Artist Power Value (APV),” which proves to be effective from their vantage point (R²=0.67). The authors then develop more novel metrics by evaluating sales data for blue-chip artists through diverse criteria, such as which wife was featured in Picasso’s portraits, composition (abstract versus figurative), subject choice (such as landscapes or nudes), and the relationship between a work’s color and its price. All of this modeling is compelling because, although Cifuentes and Charlin prefer statistical methods, they ask compelling questions about why some works are valued more than others and experiment with many variables to explain the complexities of art pricing.

But the limitations the authors confront are the same ones that economists have long faced in valuing the art market—namely, that most of the art going to market is transacted through private sales and not at auction. Even among the artworks that go to auction globally, less than 50 percent by value is sold by Christie’s and Sotheby’s, which is where all of the market-analysis data originates. In order to develop robust data sets, they concentrate on artists whose works are often seen at auction and carry the highest prices. As such, they focus on the one percent of the art market where works fetch over one million dollars and leave out any other medium except painting, including sculpture and the increasingly hot market for photography.

Given this body of limitations, it is fair to say that Cifuentes and Charlin’s results apply only to a small fraction of the art market and are not generalizable. The authors are circumspect about their analyses, often pointing to readily available models in use in the industry that, for one reason or another, have little or only very specific applicability. The same could be said of quantitative art market research as a whole—except for the survey model developed by Clare McAndrew, all data on the market are drawn from publicly available sources such as Christie’s and Sotheby’s. How much data do we really need on the market for Renoir and Monet, Picasso and Matisse, Richter and Hockney? For those interested in investing in blue-chip painting and have the means to do so, The Worth of Art will be illuminating and useful. Likewise, in terms of research on financial dynamics within the art market, the book provides some innovative approaches that have so far been published only in specialized journals.

What does this book provide to scholars interested of the anthropology of work? It sheds light on the tools employed to develop price-data analyses in the art market, as well as on the methods that “art experts” use to formulate other, less subjective means of determining value or, in the authors’ terms, The Worth of Art. In the final chapter, Cifuentes and Charlin examine art-market novelties, including tokenization, NFTs, and the use of AI to predict price outcomes. As they explain, recent research into using Language Learning Models to predict auction results has been disappointing, meaning that art experts still “have an edge” (216). As all of us face the question of whether generative AI will be able to do our job in ten years, it is comforting to know that humans with experience can still valorize artworks more effectively than algorithms—and thus the role of the art expert appears to be, for the moment, secure.

There is another layer though. Financialization may have shifted the ground under the art market since now it has become clear that many, if not most, art collectors are in it for the money. And yet, that does not mean that art is quantifiable. I mean this in the context of a sensibility expressed by the nineteenth-century literati but also in the way that the art market works. People buy and sell art, and some make a lot of money doing this. We can categorize the art sales at auction houses and galleries as a single global market, and we might even describe the art world and its many events—including art fairs and biennials, but also every exhibition opening anywhere—as an “industry” that generates economic impact.

In this domain, people and their perceptions matter and these coalesce, in effect, into the patterns that a scholar might perceive as “the art market.” An artist’s choice to make a painting or a sculpture will, in turn, determine the perceived effectiveness and marketability of their works. These will interest people, from art dealers to curators to collectors, for different reasons—but sometimes, we just look at an object and all of us, despite our differences, perceive its power to communicate something ineffable. Trying to calculate these dynamics is a very challenging task, and modeling also needs to be guided by the kinds of heterodox variables that Cifuentes and Charlin consider. If all these technological innovations will change what constitutes art, the market for art, or even the way that works can be known, this book exposes that it is only artists—not collectors or investors—who can turn ideas into beautiful objects that might, for reasons that are very difficult to determine, become valuable works of art. The real “worth of art” is, in this sense, determined by those who have made this practice their work.

Author Biography

 John Zarobell is Professor of International Studies at the University of San Francisco. Formerly, he held the positions of Assistant Curator at the San Francisco Museum of Modern Art and Associate Curator at the Philadelphia Museum of Art. His most recent book, Art and the Global Economy, published in 2017, analyzes major changes in the art world as a result of globalization.