Prices for artistic products vary greatly, from the cheap to prices high enough that only billionaires can buy them. There seems to be neither rhyme nor reason for this disparity. However, believe it or not, there is a underlying mechanism for setting prices on artistic endeavours.
There are many factors which govern prices in the art world. However all it boils down to is supply and demand. The audience desires a particular kind of work and level of desire vs the available supply sets the price on which an art piece will be sold.
The art market follows broad trends when we are evaluating demand for a particular art piece. These trends are specific to the art style itself and may or may not change over time. It is these trends that determine that the audience will want the artwork badly enough to buy it even at elevated prices.
Remember that artists do have to eat. Setting too high a price for even a highly demanded piece may backfire if the buyer goes to another artist with lower prices. On the other hand setting the price too low for a trendy item will devalue it, forcing the other artists to depress prices as well. That breeds resentment in the community.
Art made by a highly skilled artist is better refined compared to someone with lesser skills. Therefore those with higher skills command better prices compared to other. You will notice it in some of the pieces on sale on our website. Some of them are below Rs 5000 and some regularly cost Rs 15000 and more. That is the difference in skill.
Skill of an artist is hard to measure for a lay person. As the above factor is more used by experts to evaluate artwork, the common people are left to the reputation of the artist to determine if an art piece is properly priced.
Reputation matters a great deal in the art world and it comes with skill, experience and time. Artists who have a good reputation are in much greater demand and thus command higher prices.
The way to determine the reputation of an artist is to look into their portfolio as a whole and get an average pricing for their work. If the average is high, that means the artist is confident that a buyer will pay a higher price for an artwork and therefore must have a high reputation.
Bigger pieces cost more in terms of material and effort and so are priced more. Smaller pieces are therefore priced less. However, there is a threshold for how small a work can be before prices start to rise once more.
It is because micro sized work require delicate hands, skills and patience. The effort required is quite high.
In other words, more the effort required for a piece, more the price of the piece.
The rarity of a piece in the face of high demand can jack up prices significantly, specially in an auction. As auction prices partially affect regular gallery prices, they have significant influence in shaping buyer behaviour.
A one of a kind artwork from a reputed artist commands a very high premium for ownership.
This is a rogue factor that can distort prices. Sometimes a piece of art becomes a part of the life of the general public. This gives it quite a lot of value.
This is the factor which is used to evaluate graffiti (street art), heritage buildings, paintings on cathedrals and temples etc. As they are also classified as art, they are also included in this discussion.
Experts use this factor to evaluate prices when restoration work or compensation for damages are concerned.
The art market is a different beast compared to regular stock trading. However, there are similarities as well, just that a few factors wield outsized influence on how prices are affected. These are the major factors that determine the price of an artwork, whatever it may be.
Art is a way to beautify your surroundings and yourself. It is also an investment. A good art piece does not depreciate in value but continues to gain value, as long as you have a good way to establish its bonafides. It is also a good way to brag about your lifestyle and tastes.
Good art is not cheap, as it takes skill, talent and experience to create beauty.