What makes art so expensive? How has its price appreciated over the years? These are some questions that one would soon be able to answer with an ‘art index’ launched on Thursday by the Indian Institute of Management, Ahmedabad (IIM-A) in collaboration with Mumbai-based Aura Art Development (Aura Art), an art infrastructure solutions provider and specialist in art transactions.
The IIM-AuraArt Indian Art Index (IAIAI), which was launched at the BSE in Mumbai on Thursday, is a first-of-its-kind index which will trace the price appreciation journey of Indian artists at auctions globally. It will use a data-driven methodology that analyses price variations in artwork auctions of 25 Indian artists across the globe over 20 years. Some of the artists included in the list are Akbar Padamsee, Anjolie Ela Menon, B Prabha, Badri Narayan, Bhupen Khakhar, Bikash Bhattacharjee, F N Souza, Ganesh Pyne, Jamini Roy and Jehangir Sabavala. The data obtained will help art enthusiasts, financiers, insurers and other stakeholders across the sector to calculate the percentage change in the likely market price of an artwork over time.
Prashant Das, associate professor, finance & accounting, IIM-A, who launched the index with Rishiraj Sethi, director, Aura Art Development, said having a critical mass of transactions through auctions in the past 20 years was the only criteria to choose these artists. He said the number of artists will gradually increase overtime. The results of the index will come in quarterly, and the data will be updated every six months.
Das said this adds to the transparency of the arts market in general and will help in rationalising prices of the Indian art market, adding that the index time series information will tell us how over time, the price of modern artwork is evolving in India. “Over time, it can be compared to other artworks globally as well,” he said, when asked if one will be able to compare appreciation in prices of Indian art with global art as well.
The main conclusions drawn from the index indicate art prices are greatly influenced by some intrinsic (hedonic) characteristics as well as economic and behavioural factors and secondly, art price movements are somewhat predictable.
Das said the IAIAI methodology is based on hedonic pricing method that involves developing a regression model from the past listings data. The first batch of data included auction results of nearly 9,000 artworks by Indian artists, auctioned across 11 houses around the world, over a more than 20-year period, from April 1, 2001 to June 30, 2022.