Art Market Monitor

Global Coverage ~ Unique Analysis

  • AMMpro
  • AMM Fantasy Collecting Game
  • Podcast
  • Contact Us

Fine Art as a Percentage of Ultra High Net Worth Individuals’ Spending Has Remained Stable

May 30, 2012 by Marion Maneker

Adam Davidson has a good take on the art market in his New York Times Magazine column and offers an interesting take on art as an investment:

Art is often valuable precisely because it isn’t a sensible way to make money. And perhaps as a result, it has become even more valuable of late. Benjamin Mandel, an economist at the Federal Reserve Bank of New York, has been studying the art market because, he says, “it’s a great way to study asset price valuations.” Mandel read reports suggesting that the market was growing at an unsustainable clip. For one thing, prices have gone up far faster than global G.D.P.

But then Mandel realized that we had been looking at the market incorrectly. Fine art, he said, is not really part of the overall global economy. Instead, it’s part of the economy of a small subset of the super-superrich, whom some economists call Ultra High Net Worth Individuals, or U.H.N.W.I.’s. And their economy, unlike ours, is booming. In that alternate world, fine art as a percentage of the economy has stayed stable over the last decade, in part because a flood of new U.H.N.W.I.’s in China, India and other developing nations has entered the art-buying market with great enthusiasm. In 2003, the sales at Christie’s Hong Kong totaled $98 million. Last year, they were $836 million.

The art market, in other words, is a proxy for the fate of the superrich themselves. Investors who believe that incomes and wealth will return to a more equitable state should ignore art and put their money into investments that grow alongside the overall economy, like telecoms and steel. For those who believe that the very, very rich will continue to grow at a pace that outstrips the rest of us, it seems like there’s no better investment than art.

How the Art Market Thrives on Inequality (NYTimes Magazine)

More from Art Market Monitor

  • Padamsee's TestPadamsee's Test
  • ArtBasel Miami Beach Sales ReportArtBasel Miami Beach Sales Report
  • Robert Frank Is Worried About the Art MarketRobert Frank Is Worried About the Art Market
  • Robert Storr Thinks Serious Art Has a Smaller AudienceRobert Storr Thinks Serious Art Has a Smaller Audience
  • Don't Believe the HypeDon't Believe the Hype
  • Tension at the Times Culture DeskTension at the Times Culture Desk

Filed Under: Economic Trends

About Marion Maneker

LiveArt

Want to get Art Market Monitor‘s posts sent to you in our email? Sign up below by clicking on the Subscribe button.

  • About Us/ Contact
  • Podcast
  • AMMpro
  • Newsletter
  • FAQ

twitterfacebooksoundcloud
Privacy Policy
Terms & Conditions
California Privacy Rights
Do Not Sell My Personal Information
Advertise on Art Market Monitor
 

Loading Comments...