Artist Candice Gawne says she and her husband recently sat down at the kitchen table to get back to basics: How much should she be asking for her delicate glass and neon sculptures? "It was funny," she says, "like going back to the beginning of my career. I was adding up my materials - which are very expensive - and my time. And, of course," she adds with a self-deprecating laugh, she wanted to factor in "a little bit for a small profit."

The computation was sticky because this successful, 40-year veteran of the southern California art scene is no beginner. She began her career as a painter and knows the pleasure of seeing her art works fly off gallery walls for thousands of dollars. But now that she has taken up a less mainstream medium, and chosen to display the work in her San Pedro studio rather than in an upscale L.A. gallery, she says that pricing the art is "the most difficult thing for me to do as an artist."

Hard as that may be for Ms. Gawne, the whole concept of creating - or understanding - the sticker price for a work of art is even harder for the average observer. Consider the $82.5 million doled out by a Japanese collector for Vincent Van Gogh's "Portrait of Dr. Gachet" - the most money ever paid for a single work of art. Ask yourself, do you know why the painting was worth that much?

The easy answer is, of course, "it's Van Gogh, silly. And his paintings are worth lots of money, right?"

But how did they become that expensive? And why weren't they worth even a tiny fraction of that during his lifetime? (Van Gogh has set the gold standard for living and dying as an impoverished artist.) Inspired by a show that just opened at the Getty Research Institute at the Getty Center, "The Business of Art: Evidence from the Art Market," the Monitor paints a picture of how art gets a price tag. [Editor's note: The original version incorrectly referred to the Getty Museum instead of the Getty Research Institute.]

Ultimately, the auctions, collectors, and dealers set the prices on art, says Valerie Colston, art professor at American Public University System.

Of course, these institutions rely on the willingness of an art-buying public to open its checkbooks. While that may seem to give control to the purchaser, professor Colston notes that, "in reality, most people don't trust their judgment when it comes to art."

Consequently, she says, the art world has capitalized on the fact that most people believe they can't really understand why a work of art is worth what the market is asking.

It helps to realize that the process of setting value is different for dead artists such as Van Gogh, whose works now trade more like commodities, and living artists, whose worth is still being determined, particularly if they are young.

"We handle very few young artists," says Blake Koh, director of fine arts at Sotheby's West Coast, the renowned auction house. "The only reason we might put them in a show is we think they will do well based on how they've already sold with dealers and art fairs."

Auctions rely on what's known as provenance - everything about a work of art including previous sales prices and owners - as an indicator of what something is worth. "We wouldn't try to price a young artist with no track record," he says.

That job falls largely to the dealers, says Getty curator Mark Henderson. "We see that this price setting can go back and forth, but history shows that the dealers are the most influential force behind the marketplace."

Page: 1 | 2