To fake or not to fake: An empirical investigation on the fine art market
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To fake or not to fake: An empirical investigation on the fine art market Antonello E. Scorcu1 · Laura Vici3 · Roberto Zanola2 Received: 4 March 2019 / Accepted: 17 September 2020 © Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract Although carefully debated in the legal, aesthetic, and philosophical perspectives, the impact of fakes on the art market has been often overlooked by the economic literature. This paper offers a novel perspective on this issue by investigating the effects of the detection of several Alberto Giacometti’s forged sculptures. Using this exceptional quasi-experiment, the aim of the paper is to analyze whether a specific fake detection persistently influences the prices of a market segment or only exerts a short run effect. The Interrupted Time Series Analysis is adopted to evaluate the impact of fakes across percentiles of the return distribution, accounting for the overall trend in sculpture sales over the period 2000–2015. The empirical evidence shows that in the short run different dynamics emerge across percentiles, but in the medium run fake effects on returns are neutralized. Keywords Art fakes · Counterfeiting · Giacometti · ITSA JEL Classification Z1 · C6
* Roberto Zanola [email protected] 1
Department of Economics, University of Bologna, Bologna, Italy
2
University of Eastern Piedmont, Institute of Public Policy and Public Choice, Via Cavour 50, 15100 Alessandria, Italy
3
Department of Statistical Sciences, University of Bologna, Bologna, Italy
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Vol.:(0123456789)
Journal of Cultural Economics
1 Introduction Art market practitioners are publicly reluctant to acknowledge that a large number of artworks circulating on the market are likely to be forged or misattributed,1 particularly in the most expensive segments. Over 50 percent of art is forged or misattributed, as suggested by the Fine Art Experts Institute (Artnet News 2014). Even more surprising is the lack of a thoughtful debate on art fakes from the economic point of view (Day 2014). Before the pioneering paper by Frey (2000), the discussion on art fakes was mainly dominated by the legal, aesthetic, and philosophical perspectives. Frey overlooked the several subtle legal or aesthetic differences and focussed instead on the economic consequences of forgery, concluding that the beneficial effects of fakes on both demand and supply are likely to overweight the negative effects. In fact, Frey suggests that, although consumers ignore the true nature of fakes, they experience a utility gain from viewing artworks. At the same time, on the supply side, fakes raise artistic capital and support creativity, keeping the arts lively. Frank (2005) evaluated whether fakes were as expensive as originals. Having obtained from German police departments specialized in art and antiques crimes a list of forged fine arts sold in 1987–88 and 1995, he compared the (hedonic) return from fakes with the return accruing from control samples drawn from public auctions. He identified the determinants of
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