The laws of supply and demand are a fundamental plank of modern economic theory. So it is not surprising that most people assume that the value of an artist’s work will increase when they stop producing, because of ill health or, inevitably, their demise. In the art market, this is referred to as the “death effect”.
But, as so often when it comes to art, the reality is more complex: factors such as the age of an artist, their stature, fame, the amount of work produced, if their affairs have been left in order and perceived relevance to a later era all play a part. Here is our analysis of how dying affects an artist’s work, based on academic research, resale data from Sotheby’s Mei Moses index and interviews with experts.
1. Don’t die too young—unless you’re already a star
Henry Wallis’s 1856 painting Chatterton has become the archetypal image of brilliant, doomed youth. It shows the deceased poet Thomas Chatterton, who killed himself by drinking arsenic at the age of 17. It became a powerful symbol among the Romantics; and that fascination with the artist whose life is cut short — Caravaggio (38), Van Gogh (37), Basquiat (27) — continues today.
In 2011 two German economists, Heinrich Ursprung and Christian Wiermann, analyzed more than 430,000 transactions in Hislop’s Art Sale Index published between 1980 and 2005. They found that artists who died young are more likely to see a decline in prices after their death.
“At the beginning of their careers, artists have no far-reaching reputation,” they write in Reputation, Price and Death: An Empirical Analysis of Art Price Formation. “Nevertheless, a collector… may well pay a considerable price [for works by promising young artists]. If such an artist dies an untimely death, the lifetime oeuvre might not be sufficiently substantial to generate the expected reputation, and the price drops.”
Data from Sotheby’s Mei Moses shows that there are exceptions. The American Pop artist and activist Keith Haring died of Aids-related illnesses in 1990, aged just 31. Collectors who bought his works in the two years before his death have seen a median annual increase in value on resale in the years since of 13.3%, while those who bought in the two years after saw a median annual increase of 7.3%, indicating a sharp rise in value after Haring died. (Median rather than average returns are used because of the small number of resales for individual artists.)
Basquiat had a rock-star level of fame at the time of his death. This may explain the rise in his market immediately after. Amy Cappellazzo, co-founder of Art Agency, Partners (AAP), was a young student in New York in the late 1980s. “It’s very rare that someone with that kind of glamour—that kind of hold on the art public—emerges,” she says. “I remember very vividly the day he died. I was living in the East Village and I heard people saying that Jean-Michel was dead. It was a day we didn’t forget.”
2. Live long enough to become relevant again
Even economists struggle, it seems, with theorizing artists’ prices. Ursprung and Wiermann argue that reputation and demand rise throughout a successful artist’s career, peaking around the age of 70. In their model, the “death effect” on prices is negative if an artist dies young, but consistently rises with age of death until their 70s, then falls away a little for those who die at a greater age. On this basis prices for a well-known artist dying in their 80s might expect to see a bump of between 11% and 14% around the time of death. The effect, they noted, was most obvious for the “top” or canonical artists.
But in 2017 three other economists, Robert Ekelund, John Jackson and the late Robert Tollison, published research which analyzed auction results of 17 American artists who died between 1987 and 2013 (The Economics of American Art: Issues, Artists and Market Institutions). The list includes famous men (Andy Warhol), the less well-known (Millard Sheets), women (Joan Mitchell) and African Americans (Romare Bearden).
They found that prices rose at the end of an artist’s career, on average 6% over the last five years of life—suggesting the market prices a “death effect” in while the artist is still alive. This was followed by falls, on average, of 26% in the year after death (a result, they suggest, of oversupply at auction and speculation) but as the years passed, markets rose again.
Willem de Kooning, considered one of the 20th century’s greatest Abstract Expressionist painters, suffered dementia at the end of his life, so stopped working in 1991, six years before his death in 1997. Yet Mei Moses shows that collectors who resold his work in the two years before his death saw a median annual rise in value of 3.3%, those after 5.5%, a difference of 2.2 percentage points.
“There was always demand for De Kooning’s work; he always had a consistent market,” says Allan Schwartzman, co-founder of AAP. He says that, unusually, De Kooning made important late-career work and had returned to public attention. “There was a rebirth of interest in him by a newer generation of artists and collectors, which paralleled a rebirth within his own painting towards the end of his career. He became, in a sense, a contemporary artist again. The idea that an Abstract Expressionist would be as relevant to painting in the 1980s as he was in the 1940s and 1950s is very rare.”
De Kooning’s exhibition history bears this out. In the 1990s he had 27 commercial shows, an exhibition of outdoor sculpture organized by the Public Art Fund, and 10 museum exhibitions, of which three major surveys travelled to a total of 13 leading international museums. A 1995 show organized by the San Francisco Museum of Modern Art and the Walker Art Center, which also toured to MoMA, Rotterdam and Bonn, focused on the paintings of the late 1980s.
3. Don’t leave your estate in a mess
No one likes to contemplate their own mortality. So it’s understandable that some artists avoid making a will or setting up a foundation. But it is a situation artists should avoid if they want to ensure reputational longevity. Squabbling heirs, lawsuits, lack of clarity about the number of works in an estate or its long-term future can easily combine to dent confidence.
Christine J Vincent is the Project Director for the non-profit Artist-Endowed Foundations Initiative at the Aspen Institute, a Washington DC-based leadership and policy forum which studies estates and foundations. “Disputes mean that significant sums end up being expended on legal fees, depleting resources intended for the foundation’s charitable purposes,” she says. “Often the burden of legal fees compels the sale of artworks—in the worst cases, the sale of lots of artworks—which has an impact on the artist’s market in the short-term and diminishes the collection intended for the foundation.”
There are salutary lessons to be learned. The estate of Austrian artist Franz West (1947-2012) was left in limbo as a bitter five-year dispute raged, pitting a hastily set-up new foundation against his heirs. The Austrian Supreme Court finally found in the family’s favor last year.
Representation of estate has meanwhile been taken over by David Zwirner. Only late last year did West finally get a retrospective, which opened at the Centre Georges Pompidou in Paris, and travels to Tate Modern in London later this month (20 February-2 June). Prices at auction have also started rising. Four of West’s top five auction records have been set since mid-2017, with a record $871,500 (est. $600,000-$800,000) paid for a large resin, Untitled (2011), at Christie’s New York in May of that year.
When Sam Francis died in 1994, it took 10 years to settle his estate after inter-family disputes over money and works of art. When it was all over, most of the art had already been sold to pay legal bills and taxes that could have been avoided. Mei Moses data shows that collectors who bought Francis’s work in the two years before his death have seen a 4.5% increase in median annual returns, those who bought in the two years after, 7.9%. Francis’s market is only finally recovering, thanks in part, according to Vincent “to the foundation’s heroic leadership” in subsequent years.
“The governing body of a foundation needs to have business acumen, experience of managing a charitable foundation, knowledge of the foundation’s relevant program areas [such as grant-making], knowledge of the artist and art historical, curatorial expertise,” she says. The foundation’s art dealer, lawyers, accountants and investment advisors should not be board members “and we strongly discourage bodies exclusively comprising of family members, because of conflicts of interests and because it’s unlikely they have all the necessary skills”.
4. Don’t flood the market
The media coverage generated by the death of a well-known artist often persuades owners of works that it is a good time to sell. Artists’ foundations and galleries can do little to prevent a surge of works going to auction, but consignors should beware.
Vincent says: “There’s a difference between the impact of death on an artist’s market and posthumous increases over time. Our research shows that artists’ markets can be suppressed in the short-term because too many people holding work try to sell at once—and, if there are any, it can bring out the fakers.”
Data from Mei Moses, however, shows the impact of a flood of works coming to market. In the two years before the Chinese-French artist Zao Wou-Ki’s death in 2013, Artnet.com recorded 855 works coming to auction. Two years afterwards this number had risen by 49% to 1,271 (for comparison, in the equivalent period, 135 and 145 works by Cy Twombly had emerged respectively).
Collectors reselling Zao’s works before 2013 benefited from a median annual rise in value of 28%, those in the window 2013 to 2015, a rise of 23%, a drop of 5%. Since then prices have rocketed: in September last year a record $65m was set at Sotheby’s Hong Kong for a 1985 canvas, Juin-Octobre 1985.
London, New York and Shanghai-based gallery Lévy Gorvy started working with the artist’s foundation in 2017. The gallery mounted an exhibition in New York pairing Zao with De Kooning early that year. Emilio Steinberger, the Senior Partner at Lévy Gorvy, says: “The foundation’s goal is not to raise prices. Their goal, and our goal, is to broaden the view of Zao beyond being a Chinese-French pseudo-Abstract Expressionist. We see Zao as key figure in 20th century art, with an incredible powerful language, and as a bridge between [Western] and Chinese contemporary art.” The foundation, he says, is not currently selling work and instead is focusing on encouraging museum exhibitions and preparing a catalogue raisonné.
5. Get rediscovered
When Tate Modern in London inaugurated its 2016 extension with a complete collection rehang, some in Britain reacted with surprise. Had its display of works by Ellsworth Kelly really been replaced by those of Sheela Gowda? Who was Norman Lewis, a barely known African American, hanging among the Barnett Newmans and Nicolas de Staels? Yes, we know Bridget Riley’s Op Art, but who are Dadamaino and Ivan Picelj?
The history of 20th century art is being rethought at museums including the Tate, the Museum of Modern Art and the Guggenheim in New York, the Pompidou in Paris and the Los Angeles County Museum of Art—encouraged and paid for by networks of wealthy patrons. This is leading to greater exposure of work by women, African Americans and Latinos, and by artists from outside Western Europe and the US.
Nevertheless, the process of “rediscovery” is proving long and slow, as a recent analysis by In Other Words and artnet News of the acquisition of works by African Americans by US museums shows. “This is a long term, generational project,” says Robert Storr, an American critic and curator. “It was high time that the Western canon was broken down and flushed out—there was a whole field of accomplishments that needed looking at again.”
According to Alison Jacques, founder of the eponymous London gallery, which works with the foundation of the American painter Dorothea Tanning (1910-2012),“extraordinary change” has occurred. “My aim is to ensure that Dorothea is understood as a great artist in her own right,” she says. “She’s not only a Surrealist artist [closely associated with her husband Max Ernst], she made decades of work up to the late 1990s.” She acknowledges that when she started working with the Dorothea Tanning Foundation, “many enquiries were for the work from the 1940s and 1950s, since that was the work museums had focused on to up to that date”.
Unsurprisingly, the biggest rises at auction have been for work of this period. In the past four years both The Temptation of St Anthony (1945-6), and The Magic Flower Game (1941) comfortably passed the $1m mark at auction, the latter more than trebling its high estimate. At the end of 2016, Artcurial made a record for a looser, more abstract work from 1960, Visite jaune (Visite éclair), at $106,000, surpassing its upper estimate of $64,000. Another above-high-estimate record was set in 2015 for a late flower painting, Nephaster cyaneus (cloudstar) (1997) ($69,000, est. $30,000-$50,000).
“There has been a complete transformation in Dorothea’s market, at auction and in primary sales,” Jacques says. The culmination of this, she says, is the full career retrospective which has just closed at the Museo Reina Sofia in Madrid [“Dorothea Tanning: Behind the Door, Another Invisible Door”] and will open in London soon at Tate Modern (27 February-2 June). “I loved the exhibition at the Reina Sofia and I’m excited to see how it will evolve at Tate Modern,” she says.
6. Keep having shows
In June, Bernie Lagrange, Specialist in Global Fine Arts at Sotheby’s, and Michael Klein, a Sotheby’s analyst, used data to challenge the myth that big museum exhibitions cause markets to rise. They found that this was complicated by several factors: the stature of the artist, the stage in their career, the scarcity of supply, and the reputations of the curators and museum.
“Big institutional shows are important in the reception of posthumous artists’ oeuvres,” says Alison Gingeras, a curator and writer. “But it’s only one piece of the puzzle, especially if you are weighing this from the angle of the market.” Storr goes further. There’s a gulf, he argues, between the market and the world of curators. “Take someone like Mira Schendel [1919-1988],” he says. “She’s been around for ages and had a number of shows at MoMA. But it took a big dealer [Hauser & Wirth] to raise her prices.”
Nevertheless, the galleries and foundations researched for this article put a high value on museum exhibitions and acquisitions. “Museum shows keep [a deceased] artist relevant and in the conversation,” says Melissa Levin, Vice-President of Artists, Estates and Foundations at AAP. “They keep artists in an international dialogue, which is important in terms of artists’ legacy-building.”
Indeed, exhibitions are seen as so important that some galleries have taken to organizing museum-standard, partial or non-selling shows of their own. In 2017, Gagosian gallery wowed London with a show of the late landscape painter Michael Andrews, in which few of the works were for sale.
In New York Eykyn Maclean recently mounted an exhibition of the Ukrainian Modernist Alexander Archipenko (1887-1964) with the artist’s foundation. The show mixed works for sale with museum loans and was accompanied by a comprehensive catalogue. “We wanted to focus on his groundbreaking use of negative space,” says Nicholas Maclean, co-founder of the gallery. “If a show emphasizes some aspect of an artist’s work that’s been overlooked it can be very interesting. The reach of a gallery, especially in the major cities, means it can make people aware of a subject that hasn’t widely been looked at before.” Interest in Archipenko’s market is growing. At Sotheby’s New York in November the sculpture Walking (edition of eight, conceived in 1912), made $735,000, more than double its high estimate of $300,000.
7. Easier dead than alive
What happens when an artist dies is unpredictable. Much depends on their standing, the desirability of the work, the amount produced and its whereabouts, whether or not his or her affairs have been left in order, whether a powerful gallery has been engaged to handle sales, if there are fakes in the market or if there is a catalogue raisonné under way to clarify the amount and authenticity of production.
Of the 23 artists with sufficient resale information for the Mei Moses team to analyze, 13 showed an increase in value in the two years after death, five remained steady and for five prices went down. But resale information skews towards the most traded artists in the market: superstars such as Warhol, De Kooning, Rauschenberg and Calder.
Most of the experts said artists’ prices do not rise immediately after death, except in exceptional circumstances. Visibility does, however, lead to an increase in the volume at auction. artnet data shows that more work went under the hammer (in many cases significantly more) for almost all the artists on the Mei Moses list in the two years after death than in the two years before.
Long-term, the picture changes. Aspen Institute research shows that the “greatest impact on the value of an artist endowed foundation is the rise in the art market”, Vincent says. But good foundation management makes a difference. Foundations such as the Jay DeFeo Foundation have worked hard to build a reputation for an artist who was not well known when she died in California in 1989.
Dominique Lévy of Lévy Gorvy says: “Your concern and your responsibility has to be the legacy. That means understanding the artist, their significance to art history and then being the ambassador.” Apart from Zao Wou-Ki, the gallery works with the estates of artists including Terry Adkins (1953-2014) and Carol Rama (1918-2015). “Legacy means taking the work to people— artists, critics, museums, foundations, passers-by, art lovers, anyone—giving them access to that artist and to the legacy. Price is only the consequence of this,” she adds.
Legacy building is easier said than done. “Building a consensus around work is a complicated process alive or dead, but it can be easier when an artist has departed,” says Gingeras. She recently wrote a catalogue essay suggesting that Julian Schnabel’s work has been overshadowed by his financial success and social visibility.
“All the messy stuff of living, of ego has gone, narratives can be polished and stories rewritten once an artist is no longer with us,” she says, pointing to Martin Kippenberger and provocative feminist artists. “It’s much easier to historicize them without truly threatening [the art world’s] patriarchal dominance.”
It may be that, in the long term, the market finds artists more difficult to deal with alive than dead.