Art Market

TEFAF Report’s New Methodology Cuts Art Market’s Value by a Third

Anna Louie Sussman
Mar 8, 2017 2:38AM

When it comes to industry reports, methodology can make all the difference. In her first year as the author of the TEFAF Global Art Market Report, Rachel Pownall single-handedly sliced off a third of the value of the global art market. Pownall’s new methodology reduced the market to $45 billion in 2016 from a previously estimated $63.8 billion in 2015. However, when her methodology is applied to 2015, the market actually grew by 1.7% in 2016.

The revised figure quickly caused confusion and a stir—TEFAF’s estimates are often considered the last word on the size of the global art market. Skeptics took to Twitter to criticize the author’s methodology and the early coverage in the Financial Times. The full report was released to press on March 3rd but is not available for public download until Friday.

“The problem is people have been taking this [estimate] as if it were written in stone,” said Alain Servais, a collector with a background in financial services who has criticized the report’s methodological limitations in the past. “People keep repeating all day long the art market is $65 billion, and all of a sudden we have a figure of $45 billion—so what are people going to use in the future?”

Another major finding of the report is that private transactions through dealers now account for 62.5% of global sales, a 20% increase over 2015. The previous report estimated the art market was about half private sales and half sales at auction.

Evan Beard, head of art services at U.S. Trust/Bank of America Private Wealth Management, said the growth of the private market reflected what he saw among his clients in 2016, a year marked by political and economic upheaval.

“Consigning at auction is a four-month process,” he said. “Last year, Brexit, the election, and geopolitical uncertainties drove people into the private market where they have more control over the sales process.” 

Neither right nor wrong

Pownall, TEFAF Chair in Art Markets at Maastricht University, arrived at her estimate using a new methodology based on official data from government statistics offices and the United Nations, auction data from Artnet, sales data from the Orbis registry of private businesses, and survey responses from roughly 350 dealers (that figure comes from the 5% response rate she received after sending out 7,000 surveys). She received data on private sales at auction houses directly from the auction houses.

She said she hoped the new methodology could be used as the starting point for a discussion, “not ‘this is right’ or ‘this is wrong.’” Pownall added that she did not know the exact methodology used by the report’s previous author Clare McAndrew, who will present her own take on the art market in 2016 later this month as part of a new report commissioned by UBS and Art Basel. However, it seemed to draw largely on extrapolations from Artnet auction data and a more comprehensive dealer survey with roughly twice as many respondents.

“I wanted to make it different from Clare’s approach,” she said. “It’s important to have different data sources and different information.”

Out with the old, in with government statistics

Pownall estimated the size of the private market by examining art and antiques dealers officially registered as such with their respective government agencies, an approach, which she said is designed to weed out “antiques dealers” who may actually be, say, bicycle resellers or thrift stores. In the press release, this narrower approach was described as a “focused and specific definition of art dealers and art galleries,” leading to estimates “considered to be more representative of the art and antiques market globally.”

She also went through the Orbis database by hand looking for names of companies she knew, since countries’ definitions and categories differ, meaning the data is not standardized or necessarily comparable across countries. In the U.S., for example, some of the larger art dealers are registered as “art operators” or “art establishments” and she had to add those firms into her sample manually. By contrast, in the U.K. and other Central European countries, she found the government registries fairly comprehensive.

The Orbis registry yielded a global sample of 5,500 dealers and galleries. Pownall used a distribution analysis to estimate the total sales by dealers of different sizes in each country, ultimately arriving at a figure of $28 billion in private sales, or 62.5%, of the global art market.

In a previous report, McAndrew, whose new report is due out March 22nd, sent a survey to 6,000 dealers globally and received a response rate of 14% in the aggregate. It is unclear how exactly she selected that initial sample of 6,000, but her methodology mentions art dealer associations, lists of those participating at fairs, and the guidance of experts familiar with their national market.

Goodbye, multiplier?

Global auction sales came in at $16.9 billion in 2016, an 18.8% drop from the year before. That figure is based purely off of Artnet’s database, Pownall said, noting that, since 2012, the database has covered a vast share of auction houses globally; as of 2016 she believes the database has just a 5% margin of error. She did not, therefore, use any multiplier to adjust for uncounted sales.

She believes the previous report’s methodology potentially used a multiplier in order to arrive at the 2015 estimate of $30 billion. Using Pownall’s methodology of a straightforward tally of Artnet’s results, the comparable figure for 2015 is only $20.8 billion.

Demand for data

Servais said he would like to see more transparency around how the TEFAF reports, past and present, are compiled. He encouraged Pownall and McAndrew, both economists, to share more details of their methodology and post their data sets online, per standard academic practice. He said McAndrew had demurred in the past, citing a proprietary methodology. Pownall told Artsy that she would consider at some point putting her data sets online (save the surveys, whose respondents were promised anonymity).

“I could put it together and create a portal to use,” she mused, although she said it would be a significant undertaking. “I have a regular job, I can’t just do this all year round.”

Reports like TEFAF’s gain currency because art market participants are desperate for hard numbers, which are difficult to come by in the notoriously opaque industry. Deficiencies in the McAndrew TEFAF Report’s methodology were subject of much scrutiny. And the report was most instructive when looking at trends from year to year rather than taking the numbers presented at face value.

Therefore, this year’s report will become most useful next year—when it can be used as a benchmark.

With that disclaimer in mind, here are the six biggest takeaways from the 2017 TEFAF Global Art Market Report:


The market expanded slightly last year, up nearly 1.7% to $45 billion. That was largely due to growth in dealer sales, which rose by 20% to 25%, more than making up for the drop in auction sales.


Auction sales sank by 41% in the U.S., by 13% in Europe, and by 1.6% in Asia over the year. Asia nonetheless grabbed the largest share of the global auction market, at 40.5%.

Blue-chip artists such as Andy Warhol, Francis Bacon, and Pablo Picasso all had lower volumes of art sell at auction, reflecting the ongoing market narrative of supply constraints on the open market due to political and economic uncertainty.

A number of notable sales last year, such as a $150 million Klimt transaction, bypassed the auction market.


This year’s TEFAF Report found that the dealer market is more important than ever, accounting for 62.5% of the global art market. It is particularly strong and deep in Europe, said Pownall, something that intrigued her in her research.

There is a “hype about the movement towards the east,” she said, “but I think ultimately a lot of the wealth is still in Europe and the culture is still in Europe,” which is reflected in their large numbers (more than half of the world’s dealers are in Europe) and their relatively robust profitability.

The growing importance and financial success of private dealers do not tell the full story of the sector as a whole, according to Pownall. Smaller galleries “were the ones who were suffering the most over 2016,” she said. 


The strong dollar brought down sales figures for countries outside of the U.S., when the results are translated into greenbacks. Auction sales volumes in the U.K. fell by 24%  over the year, and the global dollar value of auction sales fell by nearly 19%.


Art dealers reported being excited about building their business through online channels. Web-based channels were the most widely cited sales channels through which dealers expected growth, with two-thirds of those that responded reporting they saw sales increasing in 2017 through both third-party online platforms and through their own websites.


For overall business expectations, the TEFAF Report said “the highest growth looks to come from sole traders,” or dealers with no employees; and larger dealers with ten or more employees, who expected turnover to increase by 30% on average. Mid-sized dealers, with between five and nine employees, expected lower turnover for 2017.


A previous version of this article reported that a new 2017 art market report authored by Clare McAndrew would be released on March 23rd. The report will actually be released on March 22nd.

Anna Louie Sussman