Released within weeks of one another, duelling reports by two art economists—Rachel Pownall, the Tefaf chair of art markets at the School of Business Economics at Maastricht University, and Clare McAndrew, the founder of the firm Arts Economics, who defected from Tefaf to Art Basel last year with a mandate to produce a competing report—sparked debate about methodologies and conclusions. A sampling of their findings follows:
Rachel Pownall
Tefaf Art Market Report
“At a time when austerity has resulted in much-cited global inequality, and revelations about the enormity of hidden financial wealth, buyers at the top end of the market are preferring privately brokered deals to the traditional auction setting.”
Global art trade: $45bn
Growth in 2016: +1.7%
Dealer sales, up 20%: $27.9bn
Auction sales, down 18.8%: $16.9bn
Online sales: “We refrain from aggregating online sales platforms to our world sales figures to avoid double counting”
Clare McAndrew
Art Basel and UBS Global Art Market Report
“An uplift in gallery sales prevented a deeper decline in sales overall… However… performance differed between segments, with the best results reported for dealers operating at the high end of the market.”
Global art trade: $56.6bn
Contraction in 2016: -11%
Dealer sales, up 3%: $32.5bn
Auction sales, down 26%: $22.1bn
Online sales, up 4%: $4.9bn, “conservatively estimated”.
Does data show the whole picture? The industry reacts Assessing the size of the art market is notoriously difficult. According to the 2017 Tefaf art market report, authored for the first time by Rachel Pownall, global auction and private sales reached $45bn in 2016, an increase of 1.7% on 2015. But the report commissioned by Art Basel and UBS and written by Clare McAndrew—who used to prepare Tefaf’s— calculates the same market to be worth $56.6bn, down 11% from 2015.
Both reports attempt to survey legitimate dealers of antiques and works of art around the globe, not only in the usual market centres; both are posed as definitive, if not strictly scholarly, measures. So why such discrepancies? The main problem, says the art market entrepreneur Magnus Resch, is the “huge research gap” when it comes to the murky world of private sales, which are said to account for more than half of the value of the market—up to 62.5%, according to Pownall.
Pownall, whose new methodology revalued the art market down by almost a third, relied on a variety of sources, including national statistics and financial databases (such as Orbis), to narrow the definition of art and antiques dealers. But Resch, who compiles his own survey of 8,000 galleries in the US, the UK and Germany, says using government data is “highly unreliable”, while Orbis only tracks companies with a turnover of £6.5m or more, making its data “biased” in favour of the major market players.
Both the Tefaf and Art Basel reports also partially relied on anonymous gallery questionnaires, which varied in length and complexity. Pownall’s survey of 7,000 dealers drew a response rate of 5%, while McAndrew, who questioned 6,500 dealers, drew a 17% response rate, up from 14% in her Tefaf report last year. Resch, whose Global Art Gallery Report, published in March by Phaidon, had a 16% response rate, which he describes as “high, compared with other online surveys in research circles”.
The art economist Roman Kräussl says it would be more useful to know who answered the gallery surveys. “Who approves these numbers?” he asks. “We need the same people from the same galleries answering year after year.” Kräussl says that all dealers participating in the Tefaf and Art Basel fairs should take part in the surveys, which should then be made available online, albeit anonymously.
While auction sales were down, dealer sales were estimated to be up in 2016—by 3% according to McAndrew, and 20% according to Pownall. It is a position largely supported by Tom Mayou, the director of operations at the London art advisory, Beaumont Nathan, who says private trade emerged in 2016 as the preferred environment in which to do business. “People prefer to sell privately during less bullish economic times; it is seen as lower risk,” he explains.
Mayou nonetheless describes the current estimations of the private market as “impressionistic at best, and therefore nowhere near as robust as the public equivalent”.
One danger, says the collector and financier Alain Servais, is that those outside the industry—such as potential backers for new art businesses—rely on these reports’ aggregate totals, ignoring finer distinctions between genre and size, which may lead to overly optimistic projections. Financial reports, by contrast, carry disclaimers.
Ultimately, says Todd Levin, the director of the New York-based Levin Art Group, advisory, it is not useful to quantify a market that is essentially valued qualitatively. “That’s why two Picassos painted at the same time of the same subject can sell for wildly different sums”. He adds, “There’s the old saying that you can make statistics say whatever you want them to—and in a market that is so opaque, even more so.”