The artist's coefficient and the price quotes published in auction databases are often presented as measures of what a work is worth. They are indicators of a different kind, useful for orientation, but neither expresses the value of a specific work.
The artist's coefficient
The coefficient is a tool used mainly in the lower and middle tiers of the primary market, where it serves to set the price of works by living or emerging artists according to their size. It is a list price set unilaterally by the seller, not a value formed through the free meeting of supply and demand between independent parties.
For established artists, and for reputable galleries of any size, this automatic formula plays practically no role: size is one of the elements considered, not the criterion from which the price is derived, which mainly reflects the artist's career, the scarcity of supply and the record of auction results. Even the price list of a reputable gallery remains a selling price set by the seller: for a new work it may be the reference for replacement value, relevant for insurance, but it does not coincide with market value.
Price quotes and auction databases
Auction results are the only public sale prices, which is why the databases that record them are an indispensable tool. The averages and quotes derived from them, however, have well-known methodological limits:
- not all sources state whether the price includes the auction house's charges paid by the buyer (buyer's premium);
- some record only the hammer price, which makes comparisons between transactions inconsistent;
- unsold lots (bought-in) are often left out, so the average does not show how broad or narrow the demand for an artist is;
- attribution errors in past sales are rarely corrected in the historical series.
Nor does an average say anything about the context of each sale: whether it took place in a national or international market, whether other works by the same artist were offered in the same auction, or whether it was a single-owner sale.
The factors that determine value
Comparing by size ignores the qualitative factors that make up the value of a work:
- the quality of execution and whether the work belongs to a particularly significant period of the artist's output;
- condition: damage, invasive restoration, deterioration of the support;
- provenance and exhibition history: traceable changes of ownership, presence in important collections, inclusion in historic exhibitions, literature;
- archival documentation: registration with the artist's archive or foundation and inclusion in the catalogue raisonné.
How market data enter an appraisal
In my appraisals auction results are the starting point for identifying comparables, that is, sales of works similar in period, technique, size, quality, condition and provenance, by the same artist or, failing that, by artists of comparable standing. Each figure is checked against several databases and, where possible, against the auction house's catalogue; prices are brought to the same basis and charity auctions are excluded. The comparables chosen are stated in the appraisal, together with the differences from the work being valued.