Abstract
The literature on art auctions has overlooked the market for classical music manuscripts, and this paper explores, for the first time, the determinants of ‘hammer’ prices for about 360 classical music manuscripts auctioned at Sotheby’s (London) during the 1998–2009 period. We use hedonic price regressions in order to explain the price of classical music manuscripts by several characteristics. The paper shows that the ‘trace’ of the composer (e.g. whether the manuscript is fully or partly in the hand of the composer or in a scribal hand), the artistic value of the composition, the number of pages, the period (Baroque, Classical, etc.), and of course the name of the composer and the relative scarcity of his manuscripts, are all characteristics that contribute to explain the hammer price of these manuscripts. However, parameter estimates for characteristics such as the type of music (symphony, opera, etc.) and whether the manuscript is the complete work or some fragment (say, one movement) are not statistically significant. The paper also estimates a hedonic price index that provides a measure of the average returns and (high) risk of collecting and investing in music manuscripts.
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Notes
Maev Kennedy, The Guardian, April 8, 2003.
About two centuries later, this work remains, perhaps, the most ‘modern’ work in music literature and one of the less immediately accessible of Beethoven's compositions because of its combination of dissonance and contrapuntal complexity so that it is often argued that reading and studying the score might give more pleasure than hearing it.
Daniel Wakin, New York Times, October 13, 2005.
Based on press reports (e.g. Rita Reif, New York Times, May 23, 1987; and Los Angeles Times, May 22, 1987).
For a review of auctions and the price of art, see Ashenfelter and Graddy (2003), Ginsburgh and Throsby (2006) and references therein. For research related to auctions of paintings, see Campos and Barbosa (2009), Mei and Moses (2002, 2005), Hodgson and Vorkink (2004), Beggs and Graddy (1997), Chanel et al. (1996), Ginsburgh and Jeanfils (1995), Pesando (1993), among many others. For sculptures, see Locatelli-Biey and Zanola (2002). For other collectibles, see Dickie et al. (1994) on coins, Ross and Zondervan (1989) on violins, Pompe (1996) on photographs, Graeser (1993) on antique furniture and Combris et al. (1997) on wine.
According to Scherer (2004), ‘[i]n most of Europe before the nineteenth century, composers’ ability to maintain control of musical creations as if they were their own property was quite limited. Copyists sold copies of composer’s works without the composer’s permission, and publishers issued editions that had neither been approved nor proofread by the composer, often in markets far distant from the composer’s residence but also in head-to-head competition with authorized publishers’. Because the laws were weak or even non-existent, much of this non-authorized dissemination was perfectly legal even if the term ‘piracy’ was widely used, as it is now for illegal activities with respect to music download, computer software copying, generic pharmaceutical production and reverse engineering.
Scherer (2004) also reviews some studies (e.g. Baumol and Baumol 1994, 2002) on the geography of composer supply and demand, that is, on geographical birth versus employment location, the role of magnet cities and the role of patronage and other supports of musical activities by noble courts. See also Borowiecki (2009, 2010) and O’Hagan and Borowiecki (2010).
See for example Newman (1995). In German, this aria for bass is known as Gebt mir meinen Jesum wieder. See also the crucifix in the manuscript of George Crumb’s Makroskosmos I, No. 4 for amplified piano.
However, as Greene (1974) explains, we are not expected to complete a painting in a museum by taking up brush and pallet, whereas music composers and performers work from a set of understood performance practices, leaving some room for interpretation or improvisation. According to White (1997), by claiming that ‘Bach did not intend to compose musical works’, Goehr attempts to liberate the music of Bach from the ideology of a museum culture.
The digitalized collection can be seen at http://www.juilliardmanuscriptcollection.org/.
See Scherer (2004) for an analysis of the costs of different mechanical printing methods versus the reproduction of musical manuscripts by hand copyists. At low volumes, hand copying was an attractive in-house alternative to mechanical printing. Furthermore, if a composer wanted to see his work performed shortly after composition, it had to be copied by scribes since printing took much more time than copying.
Beethoven’s trusted copyist, Schlemmer, had died the year before, in 1823, and his two replacements were clearly struggling with the composer’s occasionally appalling handwriting. The composer’s frustration can be discerned in the manuscript as he rebukes the copyist with a ‘du verfluchter Kerl’ (literally, ‘you damned fool’).
See Thayer (1967, p. 620).
This is a controversial assumption. As Ginsburgh et al. (2006) claim, it is not clear whether rarity can be introduced as a hedonic characteristic since it is not a characteristic of the work (or the artist), but of the market.
The database includes manuscripts of different sizes, from one page (for songs) to 1,346 pages for a copy of Mozart’s opera Don Giovanni. Size might reflect, to a certain extent, the scope or ambition of the composition. Of course, this is a ceteris paribus statement because in miniature lies also beauty, greatness and ambition. Anton Webern’s Six Bagatelles for String Quartet Op. 9, a 6-page manuscript that when played lasts about 4 min, is a masterwork of atonal music.
Of course, we ran into some well-known problems. Should we use birthplace versus work location to attribute nationalities/citizenships? What should be done when the definition of national territories changes over time? Date of composition is also far from clear-cut. There is variety in the practice of dating manuscripts; some are dated upon completion of the manuscript, others dated when the work was started, and others still dated when the work was first performed (see Goehr 1992, pp. 198–199). As for associating composers to period, is Schubert a Classical or an early Romantic composer?
We suspect that the descriptions in Sotheby’s might sometimes mislead (at a glance) the contents of the auction to play up the actual influence of the composer on a manuscript.
One method considered was that of using establishment scholarly sources, such as the New Grove Dictionary of Music and Musicians (2001) or the Bonds Anthology of Scores (2003), and counting the length of the entry on a given work as a proxy for its importance. However, this approach was ultimately abandoned as there is a great deal of variation between authors/editors because opinions vary in terms of how ‘important’ or deserving a work (or a composer) is of space on the page. Furthermore, musicologists and theorists will not often admit that any one work of art is somehow more important—in objective terms—than another. A second approach, finally abandoned, was to use the volume of recordings, or performances, of a given work as an indicator of its importance within the canon and, potentially, for a collector. However, this method was rejected because there is a considerable gap between what is considered a ‘great’ or ‘important’ work by those initiated into the world of classical music, including collectors, and what is merely a popular work.
The academic research of Prof. Smith, a Science Librarian, has involved extensive bibliometrics and collection development. For his work on music, his systematic ranking system indicated to us that his database is a trustworthy source and his ranking system is generally in line with the scholarly consensus.
The Sotheby’s–Christie’s collusion in the setting of commission rates is largely irrelevant for most of the 1998–2009 period, although it might have pushed up the price paid by the winning bidders in the first 2 years of the study (See Ashenfelter and Graddy 2005).
The presentation of the hedonic regression methodology closely follows Hodgson and Vorkink (2004).
The logarithm of the price is commonly taken in order to reduce the non-normality and non-constant variances of the error term, which result from highly skewed artwork price data.
Rewrite (1) for two consecutive time periods, t and t + 1, recalling that the time dummy, z, takes a value of 1 for the period considered and 0 otherwise. Subtract the two expressions obtained. Observe that other characteristics w cancel out as they are assumed constant over time. Take the antilog and subtract 1 from both sides to get (2).
A member of ‘Les Six’ (with Poulenc and Honegger), Milhaud was also quite influential and some of his students are very well known (e.g. Steve Reich, Philip Glass and Dave Brubeck).
This is for the second specification in Table 2, which is the basis for the rest of the study.
For the White test, the sample size multiplied by the R 2 goodness of fit statistic of the variance function has a χ2 distribution. For the test without cross-product terms, we have χ2 = n ×R 2 = 109.7 < χ2(0.95; T + J) = 113.14 so that at the 5 % level of significance, we cannot conclude that there is heteroskedasticity.
The interpretation of dummy variables in regressions where the dependent variable is subject to a logarithmic transformation has been of continuing interest in econometrics. The use of an ‘exact’ calculation for computing a rate of return relative to a benchmark is well known. Tests of inference (including the so-called delta method) on those ‘exact’ returns are still controversial. See Lye and Hirschberg (2002) with an application to hedonic price models.
Of the 8 styles of music, ‘opera manuscripts’ have, on average, the largest number of pages (a sample mean of 122 pages), while ‘other vocal’ has the smallest (10.7 pages). Therefore, their difference in means is 111.3. A 95 % confidence interval for the difference in sample means is given by (75.4, 147.1). Since this interval does not include 0, we can rule out that the difference in sample means is due to random variability and infer that there is correlation between styles of composition and the number of pages.
A Mozart manuscript bought at a well-known auction house in the 1970s was split up page by page. Of course, this type of vandalism should not (necessarily) be attributed to auction houses. Allegedly, Mozart's widow, Constanze, tore some of Mozart’s works in two to boost their values.
The first and second specifications can be viewed as unrestricted and restricted models, and we can do an F test on the joint null hypothesis (H 0: α j = 0) for the nine parameters associated with style, signature and fragmentation variables. We have that: F = 1.37 < F c (0.95; 9; n−T−J) = 1.9. Thus, we cannot reject the joint null hypothesis, and we conclude that these nine variables have no joint significant effect on the price of manuscripts. Therefore, we prefer the second specification, which also provides slightly lower values for the Akaike, Schwarz and Hannan–Quinn criteria.
Musicologists also traditionally tend to stay away from rankings. One exception is Farnsworth (1966) who polled across several years (1938, 1944, 1951 and 1964) the members of the American Musicological Society in an effort to learn which composers they held in highest regard.
See also the numerous comments in the New York Times (January 9, 2011) generated by the ‘Top 10’ list proposed by music critic and columnist Anthony Tommasini.
Smith (2000) has produced two rankings: (1) A ‘primary’ ranking for 444 composers based on objective criteria (number of available recordings of their music as listed in standard music recordings catalogues (Schwann, Gramophone, etc.), numbers of items on and by the composers held by participating institutions in the OCLC ‘WorldCat’ database (over 20,000 libraries) and the overall size/length of entries on the composers in about a dozen standard reference works; (2) A ‘derived’ or ‘secondary’ ranking of the 111 most influential composers based on a list of composers that they influenced. See the Classical Music Navigator for an explanation of the methodology. We compare our hedonic ranking to Smith’s primary ranking re-ordered to take into account missing composers in our sample.
Domenico Cimarosa’s opera Il Matrimonio Segreto (1792) enjoyed a bigger success than any opera Mozart had in Vienna.
Paganini, 37th in our ranking, was one of the very first ‘performing stars’ (with Liszt), famous for his technical mastery and virtuosity on the violin but (allegedly) much less for his gift as a composer.
Recall that these manuscripts are sold in English pounds. Yearly inflation is computed from the CPI index obtained from the UK office for National Statistics.
The ‘beta’ of a financial asset is defined as the ratio between the covariance of the asset’s return, with that of a general market portfolio, and the market variance. In a CAPM model applied to music manuscripts, beta measures the sensitivity of the music manuscript’s excess returns to the excess returns of a market portfolio (e.g. the S&P 500 or the FTSE 100). Excess returns are calculated relative to a risk-free asset, for example, the one-year Libor rate.
Our econometric estimate for beta is -0.61 (statistically different from 0). A negative beta means that the returns on music manuscripts generally move opposite the returns on the market portfolio: one will tend to be above its average when the other is below its average (as Fig. 3 also illustrates).
That the average real return on music manuscripts is above the real return of the S&P 500 during the 1999–2009 period indicates an undervaluation of the price of manuscripts (although this reasoning abstracts away from insurance premia, transaction costs, liquidity issues and other factors that may lead to a positive premium).
The name of the composer ‘picks up’ the musical period and this creates multicollinearity between the two variables. Hence, we generate a new specification which re-groups composers by nationality. This is a priori an interesting manuscript’s characteristic given that classical music often includes a nationalistic dimension to which some collectors may strongly identify.
On declining price anomaly, see McAfee and Vincent (1993). On the masterpiece effect, see Pesando (1993), Mei and Moses (2002), Goetzmann (1996) and Ginsburgh and Jeanfils (1995). On sales rates, see Ashenfelter and Graddy (2003), Campos and Barbosa (2009), Ekelund et al. (1998) and Chanel et al. (1996). On the role of expert estimates, see Ashenfelter (1989), Bauwens and Ginsburgh (2000), Mei and Moses (2005) and Marinelli and Palomba (2008).
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Acknowledgements
The authors would like to thank Mark Tennenhouse for outstanding research assistance while he was at the University of Ottawa’s School of Music. We also thank Erdal Atukeren, Victor Ginsburgh, Douglas Hodgson, Catherine Liston-Heyes, Charles H. Smith, and two anonymous referees for comments and suggestions on earlier drafts, and Stephen Roe of Sotheby’s for providing assistance with some individual facts. Georges acknowledges financial support from the University of Ottawa’s Research Development Program and the Faculty Research Assistance Fund; Seçkin acknowledges financial support from the Faculty of Economics and Administrative Sciences of Istanbul Bilgi University.
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Georges, P., Seçkin, A. Black notes and white noise: a hedonic approach to auction prices of classical music manuscripts. J Cult Econ 37, 33–60 (2013). https://doi.org/10.1007/s10824-012-9171-9
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DOI: https://doi.org/10.1007/s10824-012-9171-9