Arts & Culture: This is an interesting topic to think about since every work has a provenance (history of ownership), but the provenance of every work is not necessarily known.
Important works, created by artists who have always been considered historically influential, usually have a fairly detailed provenance. However, there were many artists who were once considered important but fell out of favor over the years; works by these artists, which may have originally sold for thousands of dollars, were then available for a fraction of their original prices -- basically trading as "decorative" items. When this happens it becomes very difficult to determine both the number of times an item was bought / sold and who the buyers / sellers were. This, in turn, can create gaps in the provenance.
I will use the 19th century French Academic artists as an example. During the 1880s and 1890s wealthy American collectors acquired a good percentage of these works -- and some were sold for staggering amounts. Paintings by Dupré, Ridgway Knight, Cazin, Munier, and Bouguereau cost thousands when they were originally painted. In fact, one of Bouguereau's more important works of the late 1890s was purchased for $45,000 just after it was completed! By the 1920s the Academic artists fell from grace and much of their art could be bought for under $1,000 and some for a little as $50. Hard to believe, but it is true. Great Bouguereau paintings that appeared on the market in the 20s and 30s were selling for $600 - $1,000; Julien Dupré's were available for as little as $50 and important Ridgway Knight's were selling for $300.
Since many of these works had little value during the years from 1920 - 1970, detailed records of ownership were rarely kept and much of that information was lost. Today, with a renewed interest in many older periods of art, including the 19th century Academic painters, dealers and collectors are trying to piece together the ownership history for each work they acquire -- it can add a great deal of interest, and possibly some value, to a work.
Now you may be wondering: how can the provenance add value? Well, ideally it should not, but there is something I call -- the celebrity factor. This is a phenomenon that almost exclusively lends itself to the auction format -- having entire sales that feature property from a currently famous, and not necessarily historically important, person. When sales like this take place, you often find that fans are in a frenzy to acquire something the celebrity owned and this often results in huge prices for everyday "junk." People are led to believe that just because someone famous owned the item (or is part of the "provenance") that the value of those items will remain excessively high, regardless of its quality or condition -- I personally have my doubts. I believe that years later these "general" items will be judged not only on their provenance, but on quality and condition; poor quality works will still be just that and prices will readjust.
I will add that there are times when an item's provenance will always have a very big impact on price; good examples of this can often be seen in the furniture market. If there are two identical 18th century armchairs and one belonged to Marie Antoinette, you can bet that the market is going to pay much more for the one she owned.
Anyway, when looking at a work of art always ask the seller if they know its Provenance -- history of ownership. While it is not a must, it is a nice thing to have if available.
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