Death and art prices

Why does an artist's work often become far more valuable once the artist has died?

Everyone knows the story: the artist dies unappreciated, and within a few years the same canvases that would not sell are changing hands for fortunes. Van Gogh is the fixed point of the folk version, and it seems to need no explanation — of course the work becomes precious once no more can be made.

But hold the story still and ask what it claims. It claims that a change with no effect whatsoever on any existing object — the paint does not alter — reliably raises what people will pay for it. That is a claim about buyers, not about paintings. And in the auction record it turns out true far less often than the story implies, which makes both halves worth working through.

Start with what genuinely changes at the moment of death, and be strict about it.

Two things do. The supply of that artist's work becomes fixed forever. And a large uncertainty resolves: while the artist lives, any buyer is exposed to the possibility of a prolific late period, a change of style that devalues the earlier one, or a flood of studio output. Death removes the tail of that distribution.

A third thing is not about supply at all. A death is an event, and events attract attention — obituaries, retrospectives, reappraisals, dealers with a reason to telephone collectors. For a brief window the artist is discussed by people who had not thought about them in years, and demand in this market depends heavily on being talked about.

Now ask what the folk story never asks: what pushes the other way? Several things, and they are strong. An artist's estate typically holds a great deal of unsold work, and heirs who need money release it — so the marketed supply can rise sharply just when the total supply is fixed. A living artist is also an active promoter of their own market, making new work that keeps galleries interested, giving interviews, appearing. That machinery stops. And a dealer whose business depends on a stream of new work has less reason to sustain a dead artist's prices than a living one's.

So the mechanism is two-sided, and which side dominates should depend on the artist. Where does that leave the evidence?

It leaves the folk claim in poor shape and the mechanism in decent shape. Studies of auction records — Ekelund, Ressler and Watson on Latin American painters, Maddison and Pedersen on Danish ones, and later work on broader samples — do find a measurable death effect, but consistently a concentrated and short-lived one: a rise clustered around the death and the following few years, often followed by a decline. Heinrich Ursprung and Christian Wiermann found the effect depends strongly on age at death, being most positive for artists dying in mid-career and weak or negative for those dying very young or very old.

That last pattern is the interesting one, because it is what the reasoning predicts and the folk story does not. An artist who dies old has already produced the whole oeuvre, so little uncertainty was left to resolve. An artist who dies young leaves a reputation that was never built — and a reputation is what carries the price. The scarcity is maximal and worth nothing, because scarcity of something nobody is bidding for is just absence.

A selection problem sits under all of it. The artists in auction datasets are the small minority with a resale market at all. For most, death is followed by no price rise because there was never a price series to rise. Van Gogh is famous partly because the pattern he exemplifies is rare enough to be worth telling.

Three corrections to the intuitive picture.

Fixed supply is not the same as scarcity that matters. Supply becomes fixed for every artist who dies, including the thousands nobody collects. What varies is demand, and demand is where the whole variance lives.

The uncertainty argument is the sharper of the two supply mechanisms, and often the one people mean without saying it. What death removes is not so much the last few paintings as the risk of a great many of them.

And the measured death effect is largely a short-run phenomenon around the event, which is a different thing from long-run standing. Whether a body of work is valuable in fifty years is settled by canonisation — museum acquisitions, scholarship, inclusion in the story art history tells itself — a process that runs on its own logic and can leave a well-priced artist behind. Nothing about dying starts it. The empirical picture is also noisy: samples differ by country, period and medium, so treat the direction of these findings as better established than any particular magnitude.

• How an artist's estate or foundation manages release rates, and whether deliberate scarcity works.
• Why canonisation — museum acquisition, scholarship, inclusion in survey histories — predicts long-run prices better than any event around the death.

Every term the collection defines is gathered in the glossary.