Alexa did some rather interesting and in-depth research, looking at single owner sales and using scatter plots and linear regression analysis to analyze the sales results and the impact of single owner collection known to be of excellent quality. All of Alexa's research concludes, based upon the results of her statistical analysis and an appraiser survey that provenance has a definite positive effect on prices achieved at auction from notable collections.
Many appraisers have issues and difficulty with assigning a premium for provenance. Alexa's article and statistical research will certainly help document that a provenance effect will indeed impact value. If you need to consider provenance in an assignment, this Journal article and supporting research is a must read for personal property appraisers.
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Alexa states in her article, The Provenance Effect: An Analysis of the Effect of Ownership on the Value of Fine Art.
To order the newest edition of the Journal click the button.Art valuation is challenging and different, however, from any other luxury product or commodity as there is no pricing formula or clear supply and demand pattern.
The unique nature of art and the factors contributing to the realized price of a work at auction, render it difficult to analyze and for the average collector to understand. This research will aim to examine one essential yet understudied component of art, provenance. Provenance is one of the most unique and important characteristics of an artwork as a driver of price and value. It is the chain of ownership proving authenticity and legal acquisition and, more importantly, providing a story and cachet that has the ability to increase value and the price achieved at auction. This enables the buyer to perhaps more closely relate to the work, while offering a type of brand recognition that associates the buyer with an important connoisseur, celebrity, or art historical figure. Connoisseurship and provenance are interrelated as it would seem that the more well-known and respected the connoisseur, the more valuable his ownership would be to the resale value of his or her collection. Thus, provenance has the ability to turn emotional prestige into real value for the art.
While there has been published research on some objective and quantifiable qualities of a work, provenance has only been discussed theoretically and never statistically as to the effect it has on value. This paper is intended to be an initial step in understanding the effect of provenance on value, using a statistical analysis and opinion-based appraiser survey of five single-owner auction sales from 2001 to 2009. The collectors of the sales are Stanley J. Seeger, Douglas S. Cramer, David Whitney, Allan Stone, and Raymond and Patsy Nasher. The study reveals that, on average, the provenance of the notable collector(s) of the sale increased the value of works by around 15%, with variation due to opinion of the collector as a connoisseur, the overall market environment during the time of the sale, the quality of work offered, and most importantly the strength of connection between the collector and the artists of the works. Thus, the connoisseur whose ownership is most valuable is the one that not only has a keen collecting eye, but that is a part of the discourse of art history, participating in a critical dialogue and perhaps even influencing the art itself. The percentages attributed to provenance by the participating appraisers tended to correspond with the findings of the statistical analysis, revealing again that it is the collector with the strongest association to the work whose provenance is the most valuable, not the collector with the most masterpieces nor is the ownership of an art world professional more influential than a wealthy collector.
The first chapter discusses the processes and challenges of art valuation, including the importance of provenance as a contributing factor to prices achieved at auction. The second chapter examines the connoisseurs and collectors, taste, and the motivations for buying at auction; that is, what makes an impressive provenance or collection and why buyers are willing to pay above perceived market value for such. The latter half of the essay explains the methodology and data used from the five single-owner sales for the linear regression study and the appraiser survey. In the fourth chapter the statistical results are discussed in conjunction with the appraiser survey, revealing that on the whole, the two were aligned with regard to the effect of provenance of the specific collectors. Finally, the conclusion section discusses the overall patterns which are revealed in both portions of the study, alternative explanations, and improvements to be made for future research.
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