Scott Reyburn has generated an interesting list that tries to get at the real value of works of art relative to the general economic environment. Based upon a conversation with inequality economist, Thomas Piketty’s ideas for how to calculate cost, Reyburn has produced a selection of top prices and adjusted them for US per capita income. Though the exercise is revealing, one wonders why global per capita income or country-specific were not used. A lack of available information? Whatever the reason, measuring the Czar’s purchasing power (or someone in Qatar’s, for that matter) against US wages seems to leave out the inequality in the countries of purchase, especially in a global art market:
“It’s O.K. to use the C.P.I., but I think it would be even more meaningful to take into account the rise in average income and wealth over the period,” said Thomas Piketty, a professor at the Paris School of Economics and the author of the best-selling “Capital in the Twenty-First Century.” Mr. Piketty suggested in an email that landmark art transactions from any given year should be divided by average per-capita income to reflect divergences of wealth. “It would be interesting to have some art price index over the entire 1914-2015 period and see whether it follows the evolution of inequality (I suspect it does),” Mr. Piketty added.
An income-linked list of 10 landmark art prices, together with their inflation-adjusted equivalents, from the past 100 or so years is revealing. The list accompanying this story uses data on America’s per-capita national income from the updated appendix of Mr. Piketty and Gabriel Zucman’s 2013 paper, “Capital Is Back: Wealth-Income Ratios in Rich Countries, 1700-2010.” (This is not a fully scientific ranking; it’s a list of landmark art sales in the 20th and 21st centuries that have been submitted to a consistent methodology. But no similar ranking appears to have been made.)