Assessing Art as an Investment: Applying Hedonic Value Analysis to Prints

Elisabetta Lazzaro October 8, 2007

Assessing Art as an Investment:  Applying Hedonic Value Analysis to Prints

Works of art are increasingly being recognised as assets for investment and represent a growing share of the investment portfolios of high net worth individuals. Therefore, the measurement of quality, when applied to art, is a fundamental issue in determining its investment potential. In this article, we seek to analyse how the originality of a work of art is priced by the market.

Research shows that various aspects such as aesthetics and artistic value, authenticity, rarity, symbolic and historical values all can be distinguished and evaluated in terms of market prices.

For example, originality impacts aesthetic value, because it takes into account the artist who first expressed the idea. Authenticity (such as signatures and date) is different from originality, but provides informative support and proof of originality.

Rarity, on the other hand, merely relies on quantitative availability which is driven by supply, demand and preservation. Conservation can also affect preservation and, ultimately, one’s enjoyment of the aesthetic quality of a work of art.

Originality and copies represent an important issue in today’s art market. Originality is expected to bear an intrinsic value, since a copy is generally less valued than it’s original. As we all know, collectors, dealers, experts, lawyers and the courts spend a great deal of time certifying the originality of artistic goods in today’s art market.

Originality also deals with creation and accounts for invention and innovation. But how can one "measure" originality? How much less original is a copy than its model? How can one weigh its impact? In order to answer these questions, we looked at Old Master prints as a case study to see if there are lessons which can be learned and applied to multiples (such as modern and contemporary prints and photography) and unique artworks (such as paintings) and their copies.

Old Master prints were usually made from (copper or other metal) plates. In the past the artificial restriction of limited edition and plate destruction was not in use. On the contrary, the use of plates virtually depended only on physical constraints and there were often changes to refresh a plate that resulted in a sequence of plates being produced. Besides aesthetic reasons, further plates were created by artists, such as Rembrandt, in order to satisfy or create extra demand among demanding collectors. This resulted in a variable sequence of original states from a given plate.

In addition, the original plates which were sold or survived the death of the artist were exploited and imitated by individuals other than the artist. This generated posthumous non original prints, as in the case of Rembrandt.

To examine this more closely, we have considered the market for prints by Rembrandt by applying Hedonic Value analysis. An original database has been built including almost 5,000 transactions in the international auction market during the period 1985-1998, allowing to us control for many different characteristics (for instance, market, aesthetic, originality, authenticity, rarity, art history, techniques and conservation).

We then tested to see if (non original) posthumous plates were sold at prices lower than Rembrandt's own (original) plates. We found the implicit price associated with the plate had been found to significantly decrease if the plate was later printed by someone other than the artist and when it was no longer the master's intervention on the plate.

By controlling for rarity and the other characteristics, we have found that unique original plates can be worth up to three times more than posthumous plates. Furthermore, when a print title includes three or more plates, the original prints can fetch prices up to twenty times more than the non-originals.

Clearly, collectors seem to place greater value on originality.

This is just one example of how an investor can assess the quality of a work of art by applying both quantitative and qualitative tools to the art market. As the efficiency of the art market develops and becomes more transparent, we will see even greater use of art databases which incorporate the aesthetic, historic and financial characteristics of artworks which are traded to determine their investment value.

Dr Elisabetta Lazzaro is an economist at the European Commission in Brussels and Designated Professor of Marketing and Economics of the Arts at the University of Padua. She is specialised in the art market and the evaluation of works of art. For further information on Dr. Lazzaro and her research please contact

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