Art at the Faculty of Economics and Management | Investing in Art

From February 1, 2026, the Faculty of Economics and Management of Vytautas Magnus University begins cooperation with the Kaunas branch of the Lithuanian Artists’ Association and will host exhibitions of Kaunas city artists in its spaces at Donelaičio St. 52, 6th floor. However, art in the FEM spaces is not only paintings, but also an artes liberales approach, where art is seen and analysed as an object of investment.

Seeking to educate our community about investing in art, we aim to answer and introduce you to the idea that the price of an artwork is not accidental. It is formed through several complex, interacting layers that are not only economically grounded but also deeply connected with social, cultural, and institutional relationships. In this article, we present a comprehensive, empirically grounded system of art pricing.

What determines the price of art?

1. Author’s reputation and career trajectory

An artist’s reputation accounts for approximately 70% of the price of an artwork (Artbidy, 2024). This means that the author’s name and the symbolic value surrounding it are the most important factors determining value. Research shows that an artist’s reputation and market demand together explain 45% of price variance (Artsy, 2024).

Reputation is shaped by:

Exhibition history: whether works are shown in recognised galleries or museums (Artbidy, 2024)
Awards and institutional recognition: competition wins, residencies, prizes (JournalMBR, 2025)
Publications: articles, books, catalogue publications about the artist (Art24, 2025)
Career stage: emerging artists, mid-career artists, or established (“blue-chip”) masters follow different pricing logics (Composition Gallery, 2023)

Museum or institutional exhibitions can increase an artwork’s value by 25–100% within 12–18 months, while acquisition by a museum functions as a “value multiplier” (Mash Gallery, 2025).

2. Provenance and authenticity

Provenance – documented ownership history – is a crucial element of price formation. Studies show that artworks with detailed provenance achieve up to 30% higher prices than those with unclear provenance (Calder Contemporary, 2018). For example, 5% of contemporary art objects are withdrawn from auctions due to provenance disputes (Calder Contemporary, 2018).

High-quality provenance documentation includes:

Certificates of authenticity issued by the artist, heirs, or authorised experts (Hichaa, 2024)
Exhibition history: catalogues, museum archives, exhibition lists (The Fine Art Ledger, 2025)
Publications: mentions of the artwork in academic books, journals, or catalogues (Zurani, 2024)
Ownership chain: invoices, gallery labels, collector records (Artbusiness, 2018)

Problematic provenance documentation (e.g., linked to war looting, theft, or falsified records) can drastically reduce value or completely prevent sale (Art Market Studies, 2022).

3. Rarity and supply dynamics

Uniqueness and limited supply are fundamental to art value logic. An artist’s annual productivity also matters: a master who produces 20 works per year follows a different market strategy than one who produces 50 or 100 (Artsy, 2024).

An artist’s death also affects price, but not in a linear way. Research shows an inverse U-shaped relationship between death-induced price change and age at death: the unexpected death of young artists may increase prices due to supply scarcity, but insufficient reputation prevents sustaining that increase; older, established artists experience more stable changes (Ursprung, 2008).

4. Period and significance of the artwork within the artist’s oeuvre

Not all works by an artist hold equal value. “Iconic” works – those representing the mature, most recognisable, and critically acclaimed phase of an artist – achieve significantly higher prices than early or experimental works (Artsy, 2024).

For example, Picasso’s Blue or Rose periods are considered culturally significant, therefore valued higher than some of his later works. Career transformations, stylistic phases, and biographical moments are objects of interpretation that generate symbolic value (JournalMBR, 2025).

5. Exhibition, collection, and publication history

The role of institutions is essential in value formation. Exhibiting works in recognised institutions allows galleries or collectors to confirm legitimacy and increase symbolic value (Mash Gallery, 2025).

Key indicators:

Museum exhibitions: inclusion in institutional collections or exhibitions (Dipayang, 2025)
Catalogue raisonné: a comprehensive archive of an artist’s works, regarded as the most authoritative source (The Fine Art Ledger, 2025)
Repeated exhibition links: research shows that “symbolic ties” created through exhibitions increase historical recognition, even when controlling for personal achievements (White & White, 2018)

Institutional support and exposure “consecrate” an artwork – granting it cultural value status, which then absorbs economic value (Elder-Vass, 2018).

6. Technique, size, condition

Physical characteristics of the artwork are quantitative elements weighed alongside symbolic value:

Materiality and technique: painting, sculpture, drawing, photography, video follow different pricing logics (Spaenjers et al., 2019)
Size and form: large paintings are often valued higher (with exceptions) (ArXiv, 2025)
Condition: need for restoration, surface damage, durability (ACTEC Foundation, 2025)

These parameters are incorporated into hedonic regression models – mathematical models that calculate price correlations with observable characteristics (Kim & Kim, 2022).

7. Market demand and comparable sales

The art market operates on supply and demand but is not as efficient as stock markets. Auction results serve as price benchmarks, defining “market value” for similar works (Xochi, 2025).

Key 2025–2026 trends:

Works under $50,000: sales volume increasing despite weakening top-tier market (Women in Arts Network, 2025)
Works above $10 million: decreased by 39% (YoY May 2025); segment under $10 million grew by 17% (Bank of America, 2025)
Global art sales value 2025: $57.5 billion (down ~12% from 2024) (Artsy, 2026)

This indicates a shift toward middle-market expansion – more accessible prices attract collectors, while speculative peaks decline (Arterritory, 2025).

8. Liquidity and transaction costs

Art is not a liquid asset in the traditional sense. Liquidity is episodic – it requires a willing buyer, a capable intermediary, and favourable timing (Mercer Advisors, 2025).

Costs affecting total return:

Insurance: 0.1–2% of collection value annually (Hotaling Insurance, 2025)
Storage and transportation: climate control, storage rental, logistics (Citrin Cooperman, 2025)
Conservation and restoration: essential for long-term preservation (ACTEC Foundation, 2025)
Selling fees: auction houses charge ~15% seller fees; buyers pay additional premiums (MyArtBroker, 2026)

Investors should expect a 6–7 year investment horizon to compensate for costs and market volatility (The Art Newspaper, 2025).

9. Broader context: economic cycles, collecting fashions, institutional directions

Macroeconomic conditions strongly affect the art market.

2025–2026 market conditions:

Early 2025: historically lowest post-pandemic market (global art prices at 25-year low) (CKGSB, 2026)
Autumn 2025: partial recovery; early signals suggest the market “may be emerging from the deepest downturn” (CKGSB, 2026)
Regional trends: Americas +25.7%, Germany +20%, Asia-Africa-Oceania index −14% (CKGSB, 2026)
Psychological shift: speculation motives of 2021–2022 disappeared; 2025 collectors became more selective, sincere, less profit-oriented (Hype and Hyper, 2026)
Galleries: 75% cite economic uncertainty as the main challenge; 57% expanded online activity (Artsy, 2026)

Macroeconomic factors – inflation, interest rates, geopolitical tensions – influence purchasing power and willingness to invest in riskier assets (Arterritory, 2025).

Price formation: primary vs secondary market

Primary market (galleries)

Prices are set by galleries and artist representatives based on:

Education, exhibition history, residencies
Qualitative analysis of works
Strategic market goals (price stability, reputation growth) (Velthuis, 2013)

Galleries “intentionally do not price each work separately” but apply pricing scripts to maintain consistency within an artist’s portfolio (Artchart, 2022).

Secondary market (auctions)

Prices are determined by competitive bidding (Artbidy, 2024). Each artwork is evaluated individually based on quality, condition, provenance, and current demand.

Pre-sale estimates act as anchor points influencing bidding behaviour. Research shows machine-learning valuation models can outperform expert estimates, especially for volatile artists (Spaenjers et al., 2019).

Symbolic value and cultural capital

Art as an “acquired taste”

Art can indeed be an acquired taste – formed through cultural learning and social interaction. Pierre Bourdieu’s framework explains how cultural capital shapes value construction (Art Collector IQ, 2025).

Forms of capital:

Economic capital: money to purchase art
Cultural capital: knowledge, education, interpretive ability
Social capital: networks with artists, galleries, curators, collectors

Symbolic capital (prestige, reputation) ultimately outweighs economic capital in the long run (Art Collector IQ, 2025).

Social signals vs visual features

Research shows social signals (reputation, institutional support) predict prices better than visual features, especially in emerging markets (Fraiberger et al., 2024). Buyers purchase not just the artwork, but the “artist” – name, status, promise of future value.

Emotional resonance and the “aesthetic dividend”

Emotional connection plays a central role in pricing (JournalMBR, 2025). The “aesthetic dividend” – subjective pleasure and intellectual satisfaction – explains why collectors pay irrationally high prices for personally resonant works.

Strategic opacity and the role of gatekeepers

Pricing is not transparent. Strategic ambiguity is maintained by galleries and institutions (JournalMBR, 2025). Gatekeepers control access, consecration, and legitimacy (Academia, 2014).

Value is thus a social construct, not an objective property (IMMA, 2018).

Investing in art and strategic thinking

Art investments have become a serious alternative asset:

Art funds average ~15% annual returns (blue-chip); 84% profitable exits (The Art Newspaper, 2025)
20% art allocation can improve risk-adjusted returns by ~20% (ArXiv, 2024)
Weak correlation with traditional assets enables diversification (Gupta & Manchanda, 2023)

But art is speculative and illiquid by nature (The Art Newspaper, 2025).

Conclusion: value follows logic

Art prices are not arbitrary. They emerge from a multilayered social process combining economic, cultural, psychological, and institutional forces. Supporting culture through collecting and patronage is an investment in cultural future and social prestige.