Auction Houses and Contemporary Art : A Study of Outstanding Sales in 2007 and 2009

Abstract: This thesis aims to analyze contemporary art market in terms of auction sales carried out bySotheby’s and Christie’s in London and New York in 2007 and 2009. The study deals withinvestigating the cases when artworks’ prices exceeded their estimates. A model testing therelationships between hammer price, auction house, artist, form of art, the year of object’screation and its current owner along with the year of sale and performance of stock marketwas developed according to the theoretical framework, which includes such concepts as artobjects and their value, gatekeepers and investment and auction theories. Regression analysis revealed that the presence of a pre-lot note published in auctioncatalogue and specifying the collector putting the artwork for sale and the year of art piececreation have a significant contribution to predicting their hammer price. Moreover, theanalysis identified that paintings and sculptures typically reach high prices while drawings,watercolors and gouaches appeared to be less expensive objects. As far as the artists areconcerned, the study showed that pieces by such top artists as Andy Warhol, Jean-MichelBasquiat, Gerhard Richter, Willem de Kooning and Jeff Koons tend to achieve outstandingresults more often. The cases of over-performance were identified according to the model, which provided anopportunity to estimate predicted hammer price and compare it to the one achieved duringthe sale. Analysis did not reveal a clear pattern among over-performers, however, it can beobserved that objects sold at Sotheby’s tend to over-perform slightly more often; AndyWarhol and Damien Hirst appeared to be the artists whose artworks reach prices higherthan the estimates; and watercolors, drawings and gouaches along with sculptures, statuesand figures and photographs and prints turned out to be the over-performing forms of art.