Issues with Art Market Reports

artnet news takes a look at some concerns and issues with what is being reported in the new Hiscox Online Art Trade Report, click HERE for the AW post when it was published).

The artnet news article takes issue with the small number of art buyers surveyed (758) especially given the size and important guidance given within the report. The second issue is that both dealer and collector surveys gather data from other collectible categories. The article also notes there are similar issues of limited data in both the TEFAF and Art Basel reports. But, these reports are the few credible publications which are available to small professionals as well as collectors. The lack of data points might be something to consider when using and looking at market analysis. Perhaps a short disclaimer might be in order.

artnet news reports

On Tuesday, specialty insurer Hiscox and market-analytics firm ArtTactic released the 2017 edition of their annual Online Art Trade Report. As usual, the study made colossal claims about e-commerce in the industry, including that total estimated sales reached $3.75 billion in 2016—a value alleged to account for “an 8.4 percent share of the overall art market,” based on the cumulative figure assigned by the 2017 TEFAF Art Market report. (You know, that one.) As usual, pundits and insiders around the art business immediately began spreading around these numbers like the clap would tear through a freshman dorm in a latex famine. And as usual, the methodology, which only maniacs like me bother to read, reveals the report to be almost a complete exercise in guesswork.

Since bulleting through every issue I see with Hiscox/ArtTactic’s approach would leave me with no time or ammunition to hit anything else this week, let’s just focus on the two most glaring problems. First, as I’ve written before, many, if not most, of the report’s grand results flow from a kiddie-sized pool of sources. This year, responses came “from 758 art buyers surveyed through ArtTactic’s client mailing list, Twitter, and Facebook.”

Largely informed by those 758 anonymous art buyers, Hiscox and ArtTactic felt comfortable making multibillion-dollar proclamations about an industry rightly pegged as “gloriously opaque” by Robert Read, Hiscox’s Head of Art and Private Clients and, based on the above portrait from page 3 of the report, humanity’s world champion in obliviousness to camera placement. Even if small samples don’t unsettle you all on their own, ask yourself this: If our threshold for belief in an alleged news item becomes netting 758 responses on social media, won’t we all be living in bunkers, militia barracks, or prison cells by Memorial Day?

The report’s second major problem bridges both the buy and sell-sides of the data. Regarding the collector survey, Hiscox and ArtTactic disclose the following wrinkle in the proverbial fine print of the methodology (emphasis mine): “Although the central focus is around fine art, we have in this survey also explored online buying habits of OTHER COLLECTIBLES.” Similarly, of the 132 galleries and dealers surveyed for the study, 60 percent “were linked to contemporary art, whilst 40 percent represent a wider selection of dealers in different collectible areas (such as photography, modern and impressionist art, design, furniture, decorative art, antiquities and old masters).”

In practice, this means we have literally no idea what proportion of the Hiscox/ArtTactic numbers apply to artwork versus, say, Louis XIV armchairs or Neolithic ritual masks. No matter what a particular reader’s preferred niche may be, indiscriminately blending the data from all these disparate sources into one churning mystery stew makes the end result equally rotten for everyone.

Most important of all, this last flaw isn’t even exclusive to the Hiscox/ArtTactic report. Instead, it reappears to some degree in even the most trusted annual art-market reports, including those from TEFAF and Art Basel/UBS. And yet, after years of analyzing these reports, I can’t recall a single instance of anyone in the art industry ever sounding the alarms about this foundational problem. Instead, it’s been normalized into oblivion.

Yes, the fine-art and collectibles markets share many qualities. But for those of us solely concerned with quantifying the art industry, treating all collectible numbers as equal is like treating fun-size candy bars and new toothbrushes as interchangeable to trick-or-treaters because, hey, they’re both prepackaged items you can easily chuck into a sack. But guess what? The kids care about the difference. And if we ever hope to get anything close to accurate big-picture data about the art market, we should too. 

Source: artnet news