The Market for Paintings in XVII Century Italy

We study the XVII century market for figurative paintings in Italy, analyzing original contracts between patrons and artists: this is one of the first manufacturing markets for which econometric evidence of the basic laws of economics can be found. Size of paintings, expected quality, type of commissions and aggregate shocks affect prices as expected. We find evidence of contractual solutions to moral hazard problems in the patron-artist relation: since quality was not negotiable, prices were made conditional on correlated variables such as the number of figures depicted. We find evidence of price equalization between high and low demand destinations due to endogenous mobility of the painters (or the paintings). We also provide support for the Galenson hypothesis of a positive relation between age of experimental artists and quality as priced by the market