Unlimited Prices: An Extreme Value Distribution Approach to Estimating Art Prices

I set out to construct a valuation model for paintings using a newly created sample consisting of paintings sold at Impressionist and Modern art auctions at Sotheby’s between the latter half of 2003 until the end of 2006. I create a valuation model using the standard hedonic regression methods used by other researchers in the art market and describe a new way of viewing the dynamics of the art market, leading to an extreme value distribution approach to estimating the hedonic regression. The resulting models, using both the standard method and the extreme value method, are then compared to the performance of the Sotheby’s own pre-sale estimates