Survivorship bias is a statistical trap in which we draw conclusions only from the cases that “survived”, while the unsuccessful ones quietly drop out of the data. On the art market the survivors are the works and names that sell repeatedly and expensively. Nobody notices the others, forgotten or unsold, in the tables. The resulting picture is therefore always somewhat rosier than reality.
A typical example is the Artprice 100, an index of the hundred strongest names on the auction market. Its composition is set each year according to auction results over the previous five years and whether an artist sells regularly, so names whose market has faded steadily drop out of it. In 2021 Artprice reported that the index had risen by 405 per cent since 2000, adding itself that comparisons with equities should be treated with caution. In a similar way, the Sotheby's Mei Moses index compared only works that had sold again.
They will not tell you how an ordinary collector who once bought across the market would have fared. The economists Korteweg, Kräussl and Verwijmeren showed in a 2013 study that works whose price had risen return to auction more often. Once this selection was corrected, the average annual return of their painting index for 1972 to 2010 fell from 10 to 6.5 per cent. An index thus measures the successful, not the whole market. And how many paintings that sold for high prices in 2000 will you never come across at auction today?
Treat indices and reports as a guide, not a prophecy, and with every figure ask what is missing from the data. With contemporary art that has not yet reached auction, follow the artists themselves instead: where they exhibit, which curators they work with and who collects their work. That is why the Czech J&T Banka Art Index rests not on prices but on exhibition activity. And the number of followers on social media? That is certainly no index.
— Anna Pulkertová, founder of Art Part Club
Related terms: Market reports and indices · Appreciation of art over time · Blue chip · Liquidity · Rankings of best-selling artists
