What sells and why at the very top of the global art market

FRANCIS BACON’S “Three Studies of Lucian Freud” became the most expensive painting ever to be sold at auction when it went under the hammer in New York in 2013. At $142m (£89m) including the buyer's premium, it cost 18% more than Edvard Munch’s “The Scream”, which had sold the year before. But if prices at the top end of the art market can change so much in 18 months, how might they alter over a much longer timeframe? A new paper attempts to answer the question by tracing the rise of the record amount paid for a work of art at public auction since 1701 and the reasons for this increase.

William Goetzmann, Elena Mamonova and Christophe Spaenjers point out that theirs is merely “a” list of records, as opposed to “the” definitive list. It uses nominal prices that have not been adjusted for inflation, and denominates in sterling on the grounds that the global art market was based in Britain for a long time. (If you do adjust for inflation, Van Gogh's "Portrait of Dr Gachet" becomes the most expensive painting ever sold at auction, having fetched the equivalent of £97m in 2013 prices when it was sold in 1990.) Only the highest price attained at any given auction has been considered, so records that might have been broken earlier at the same event are ignored. And the authors accept that they may have missed some early record-breakers owing to the incompleteness of the historical data.

Yet even with those caveats the list still warrants close study. A look at the buyers shows how the European grandees who dominated the early art market gave way to American businessmen. In the 1980s Japanese buyers enriched by their country’s newly muscular economy pushed prices upwards. And since then an increasingly globalised art market has produced a global roll-call of wealthy purchasers. Social competition among the “nouveaux riches” is a factor in rising costs. And supply constraints certainly matter, as does a particular artist’s fashionableness. But at any given auction it is often simply the presence of two very rich people absolutely determined to get their own way that drives prices to extraordinary heights.