DALMI-HAM-F2017-02

The Impact of Catalogue Description on Perceived Value of Art

by Moses Wayne, Joe Jacob, Anngelyque Stevenson & Benjamin Ayto (2017)

Over the past few decades an increasing number of actors and institutional players have participated as buyers in international art auctions, investing significant amounts of money in art for speculative and consumptive purposes. As auction houses play crucial roles in the valuing of art, this project seeks to address a gap in existing research by interrogating how the amount and content of information disseminated by auction houses in sales catalogues affects the perceived value of art, buyer confidence, and auction sale outcomes. Conducting textual and sentiment analyses of Sotheby’s auction catalogue entries for all international locations between 2000 and 2017, we performed multivariable regressions on the resulting data. Controlling for regressors on textual analysis as well as year, auction location and lot item type, this research project developed a hedonic model for assessing the eventual hammer price for works sold in auction. The derived model has markedly high explanatory power, and when applied to unsold works, the hedonic model on average predicts a hammer price less than the high estimate reported by Sotheby’s for unsold works. This study found that the length of available information on a work of art in the auction catalogue is both statistically and economically significant on the eventual hammer price of the artwork. Furthermore, while the textual analysis regressors indicate statistical significance, their economic significance is observably weaker.

Keywords 
Art Markets, Catalogues, Textual and Sentiment Analyses

JEL Classification:
Z11

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