What’s it going to take to increase the level of art sales in the market and bring in new buyers? That was the question Yale professor Magnus Resch put to me as we were driving back from New Haven to New York last Friday night. Magnus teaches a class on entrepreneurship in the art world at the Yale School of Management, and I’d just shown his students a series of charts summarizing the last 17 years of auction data. The final slide depicted the auction totals adjusted for inflation—a particularly revealing data point.
According to the numbers, the art market is way down from its peak in 2015. And yet, on some logical level, it shouldn’t be. After all, there’s been academic research showing that ultra-high-net-worth individuals are spending the same proportion of their wealth on art… and the number of UHNWIs has doubled in recent years. So, why are we not seeing these facts reflected in the auction market data? There are a number of possible explanations, but I want to focus on just one here, because it resulted from what I thought was an interesting and serendipitous conversation.
