The colour purple...is not one you should use in a painting
Our chart of the day is actually a picture. And not just any picture. It is the painting called “Orange, Red, Yellow” by Mark Rothko. This 1961 painting was sold in a 2012 auction at Christie’s for $86.9m – a record price for post-war contemporary art at that time. Since then, prices for abstract art have gone even higher but what makes this painting special was the shock it created in the art world after it was expected to fetch a mere $45m. In the end, three bidders got caught up in the bidding for more than six minutes – one of the longest bidding wars ever recorded at an auction.
Why this painting? Because, according to art experts, it has what is called “wallpower”, i.e. the ability to mesmerize and captivate viewers that makes them “want it”. I don’t know about your views on abstract and contemporary art, but I like it a lot and Mark Rothko together with Jackson Pollock and Yves Klein are my favourite artists. However, many people don’t like abstract art and many art collectors apparently act not based on expertise but on their desire to show off and impress other people. This goes for the prices they are willing to pay for these works of art, but also for the kind of art they buy. After all, if you want to show off your masterpiece to your Mar-a-Lago buddy, it better looks good on a wall.
Hence, paintings that look good should sell for higher prices at auction. And this is indeed what we observe in the market for abstract art. Marshall Ma and his colleagues investigated auction prices for paintings and their correlation with the colours these painting show. They looked at paintings, auctioned off between 1994 and 2017 in six schools of modern art: colour field, Washington colour school, abstract expressionism, abstract imagist, post-painterly abstraction and Bauhaus. Then they determined, with a computer, what percentage of the painting was black, red, orange etc. and how dispersed these colours were over the entire picture.
Controlling for other important features like authenticity, provenance, size, etc. they found that red and blue paintings demanded a premium, while green and yellow did nothing and purple led to a discount on the auction price. Leaving everything else constant, a one standard deviation increase in the number of blue areas in a painting leads to a 10.6% increase in the auction price. A one standard deviation increase in the colour red leads to a 4.2% increase in the auction price, on average. Later, the researchers did laboratory experiments in China, the Netherlands and the US and found that independent of the region, people were willing to pay more for blue and red abstract paintings than for any other colour.
So much for the “expertise” of art collectors. Apparently, all you need to be to boost the price of your paintings is to choose the right colours and make it pleasing to the eye. People who want to invest in art should correspondingly invest in red and blue paintings, not in purple, green or yellow ones. Who says we don’t give good investment advice in this newsletter?
Mark Rothko: Orange, Red, Yellow
Source: Wikipedia.