If you want to invest in a Picasso…

Assume you won the lottery and now you can make your dream come true and buy a Picasso painting at auction. If you want to get it as cheaply as possible, for which of the two paintings below should you bid?

Two Picasso paintings

Source: The interweb

Obviously, this is the same painting, once hung vertically and once hung horizontally. But according to Stephen Norman and Howard Smith from the University of Washington, the picture on the right will achieve a lower auction price than the one on the left. And not just a little bit lower.

They analysed the auction results of more than 1,300 Picasso paintings and controlled for subject matter, period, and other factors that influence the price. Then they plotted the ratio of picture height to width and noticed something weird. No matter what the subject matter was or from what period the painting was, whether it was abstract or figurative, vertical pictures systematically achieved higher auction prices.

Auction price discount for horizontal pictures

Source: Norman and Smith (2025)

Now, I get that a portrait fetches a lower price when it isn’t in – well – portrait format. But even landscape pictures fetch lower prices when they are in – well – landscape format. Why is this? Nobody knows. The authors make no effort to examine why horizontal paintings fetch lower prices. And if you ask me, this is likely a case of spurious statistical significance since not all of these price discounts are statistically significant and those that are, only at the 5% level. And if you torture data long enough, some of it will confess to anything.

But if it is a real effect, here is a top tip for art collectors: Buy an abstract painting in a horizontal format from a famous painter. Then own it for a couple of years and sell it as a vertical painting and cash in on the premium.