short time period is bound to cause problems for the auction market of an artist’s work. Considering that some contemporary artists who have no auction track record at all are achieving prices at auction that are usually the sole domain of famous master artists, the inaccuracy of auction estimates is hardly surprising.
It is always in the best interest of auction houses to keep estimates lower rather than higher to encourage competition and bidding but I do not think that auction estimates are being suppressed any more than they usually are. At the end of the day auction houses are businesses whose primary goal is to make money and as such they really have no obligation to present accurate estimates. The use of auction estimates as a marketing tool is something that has been going on for a long time and is perhaps just more apparent due to the media scrutiny of the prices being paid for works of art by Chinese artists.
Q2. (A tricky one..) Are the works themselves worth the prices being paid?
Nic’s Answer: The true “value” of an artist’s work is something that is developed over a long period of time and is primarily a reflection of – among other things – their cultural and art historical importance, the influence that they have had on their chosen genre and medium, and the results of critical review. As an artist’s career progresses through the various stages of development the dollar value of their work also develops and progresses. Prior to appearing at auction, artists usually sell their work through private commercial galleries which helps create a stable and justifiable price point for their work. One of the problems facing the Chinese art market is that China has an underdeveloped private gallery system that cannot support the number of contemporary artists being thrust into the limelight at such a rapid rate. Many Chinese contemporary artists are skipping the private gallery stage of their career and going straight to auction which makes the value of the work much more unstable and unjustifiable over the long term.
What makes valuing works of art so difficult is that there are two types of value that are especially relevant to the Chinese art market. The first value is the true artistic value of the work of art and the second value is the prestige and social status that comes with owning a piece of expensive fine art. Are the works of art being sold worth what people are paying for them from a market/artistic value? The answer would have to be no for two reasons, the first of which is that many Chinese buyers are being driven by a desire for social status and prestige. Secondly, many of the artists whose prices are being driven to extreme heights do not have the career credentials to justify the prices being paid. Are the works of art being sold worth what people are paying for them from a social status/prestige perspective? The answer