The ‘Death Effect’ in Art Prices: A Demand-Side Exploration

Many factors affect the supply and demand characteristics of artists' output. This exploratory study focuses on a ``supply-induced'' demand effect –the death of the artist and the assurance that, from the perspective of the durable goods monopolist, the output of the artist ends. While not purporting to be a formal test of that proposition, we observe, using U.S. auction data, a clustered rise in artists' values immediately around the time of death and suggest some possible demand-side explanations using a sample of Latin American artists between 1977 and 1996.