Exhibit 1. Caravaggio, The Fortune Teller, Paris, Louvre Museum ©
Economists are always on the lookout for new data to test their theories. But rather than sit around itching for the latest surveys or commissioning new randomised trials, researchers might want to dig up what we already have. With a bit of luck, the pages of history can be a rewarding friend. Take for instance the well-documented details of painters in 17th century Italy, at the height of the Baroque age. This is an example of a high-skilled labour market and can provide a fruitful area for study.
One of the most impressive and rapid features of the Baroque art movement was the innovation that led mass productions of new genres of painting – to the economists among us, this is a form of horizontal product differentiation.
Beyond old genres such as figurative paintings (including religious, mythological, and historical subjects) and portraits, the new genres of the Baroque art market included still lifes (reproducing animals, fruits, flowers, and lifeless objects), landscapes (reproducing the countryside or the urban environment), so-called genre paintings (reproducing daily life scenes, as in Exhibit 1 by Caravaggio) and battles (reproducing fights without necessarily a specific historical content). Each genre represented a specific sector of production, and painters either specialised in one or few genres or they could switch between them according to the market opportunities driven by price differentials (think of Caravaggio, who introduced still lifes and genre paintings and yet was often engaged in figurative paintings and portraits).
A unique dataset established at the Getty Research Institute under the coordination of the art historian Richard Spear (see Spear and Sohm 2010) has put together data on a representative sample of paintings commissioned in Rome during the 1600s. In this sample the average price of still life paintings was about 17 silver scudi, against 25 scudi for genre paintings, 39 for portraits, 66 for landscapes, 73 for battles, and 240 for figurative paintings. These huge differences were largely motivated by the hierarchy of genres in the artistic culture of the time. The most dignified and worthy subjects were those depicting creative compositions of idealised human figures, followed by idealised landscapes. Compositions of the daily aspects of reality (genre paintings) were at a lower level, while the least worthy genres were those imitating reality without idealisation (portraits and, at the lowest level, still lifes). Such a ranking was well understood between art critics and art collectors.1 Later in the century, it was even codified by the art academies.2
Of course, paintings of different genres differ from many points of view (size, technique, support, destination, etc.) and price differentials did not necessarily reflect differences in the effective compensation of the painters. However, as long as the market was competitive and painters could freely choose whether to specialise in one genre or switch between genres to exploit profitable opportunities, we can hardly imagine that systematic compensation differentials could persists between artistic sectors. For instance, if the compensation for landscapes was above that paid for still lifes of equivalent features because buyers had a relative preference for landscapes, we would simply expect more painters to paint landscapes until the price differential disappears, eliminating any profitable opportunities. In other words, in equilibrium painters should be allocated between commissions to the point of equalising the marginal return of each genre. To put this version of the 'law of one price' in an extreme way: a square metre of painted canvas commissioned to the same painter from the same patron under the same conditions should be priced independently from what it represents.
Painting still lifes, portraits, landscapes, or altarpieces?
In a joint paper with Silvia Marchesi and Laura Pagani, we present an econometric investigation of the data put together by Spear and Sohm (2010), allowing us to test this hypothesis of price equalisation between genres (see Etro et al 2011). To do this, we adopt a labour-market perspective in which different genres are interpreted as different industries, different patrons as different firms, and different painters as different workers. After taking into account some basic determinants of the price of paintings, such as size, composition (more figures were paid more), support (canvas or panel), technique (oil painting or frescoes)3 and other demand and supply determinants related to the painters and the patrons,4 we can look at the residual differences between the prices of different genres.
It turns out that these differences disappear, and that most of the inter-genre price differential is explained by the variation in average individual heterogeneity across artistic sectors. This suggests that the Baroque labour market for painters was already quite competitive and allocated artists between artistic genres to the point of equalising the marginal return of different genres. In a sense, if figurative paintings were paid more in absolute terms, it was mainly because better painters were engaged in figurative paintings (which also had a larger size on average). On the other side, minor painters could not switch from still lifes to figurative paintings to earn extra profits because they would have been paid less than other painters. How much less? Exactly enough to make them indifferent between genres.
We did however find some evidence of residual price differences at the employer level: some patrons paid systematically more than others. These differences can be explained in terms of efficiency wages to induce effort in the production of artistic quality. In some cases, as for St Peter's Basilica or the top noble families (the Medici, the Gonzaga, and foreign kings), higher prices, up to four times as ordinary, were paid to induce more effort and therefore quality (Shapiro and Stiglitz 1984). Other important families such as the Barberini, the Borghese, the Chigi, the Colonna, the Popes active during that century, and other foreign nobles could arrive to pay two or three times as much as ordinary commissions to tease out more effort and quality from the painters. The duality of the labour market, in a sense, was present even in this old market.
Signalling ‘magnificence’ in the private chapels
We also find a number of additional results concerning incentive mechanisms. One derives from an idea recently advanced in a book written by an art historian and an economist, Nelson and Zeckhauser (2008). The idea is that different locations for the commissions could generate different willingness to pay and consequently different incentive mechanisms to induce effort and quality. In particular, commissions for private family chapels placed within churches could guarantee high visibility to their patrons in front of the fellow citizens, of the political and ecclesiastic power (and even of God), and signal what at the time was called ‘magnificence’, with high benefits for the patrons.5 According to the Nelson-Zeckhauser hypothesis, we should expect stronger incentive mechanisms to induce quality and higher prices for paintings addressed to private chapels compared to common religious commissions (financed by the churches or other religious institutions) and especially compared to other private commissions which were not necessarily destined to public display (those for private palaces and collections). This is exactly what we find, with a 70% price premium for identical paintings destined to private chapels rather than private collections.
As a last question, we may wonder who were the best recognised artists after taking everything into account, which amounts to build a ranking of appreciation of the artists based on the preferences of that age (as revealed by market prices for an average painting). In this ideal ranking, we find Carlo Maratta in first position: he is not that famous today, but was by far the best-regarded master of the second part of the century (when the centre of Western art started to move away from Rome toward France). Two of the most famous painters of the first half of the century, Pietro da Cortona and Guido Reni, are right behind Maratta, and (surprise, surprise) the nowadays celebrated Caravaggio is between them in the ranking. Poorly considered by his rivals at the time, and often engaged in minor genres such as still lifes and genre paintings, Caravaggio was nevertheless well appreciated by the market. Finally, two French landscape specialists such as Nicolas Poussin and Claude Lorrain, and a painter of battles and genre paintings as Salvator Rosa rank between the best remunerated artists.
In conclusion, the data on Baroque painters show that economic reasons made it possible for new artistic genres not only to develop, but also to flourish in this and the following centuries.
Etro, Federico (2010), “Titian, Veronese, Caravaggio and their rivals: Evidence of competition in the market for altarpieces of the 17th century”, VoxEU.org, 4 November.
Etro, F, S Marchesi, and L Pagani (2011), “The Labor Market in the Seventeenth-Century Italian Art Market”, Working Paper, University of Venice at Ca’ Foscari.
Etro, F and L Pagani (2012), “The Market for Paintings in Italy during the Seventeenth Century”, Journal of Economic History, in press.
Nelson, J and R Zeckhauser (2008), The Patron's Payoff. Conspicuous Commission in Italian Renaisssance Art, Princeton University Press
Shapiro C and J Stiglitz (1984), “Equilibrium Unemployment as a Worker Discipline Device”, American Economic Review, 74, 433-44.
Spear, R and P Sohm (2010), Painting for Profit: The Economic Lives of Seventeenth-Century Italian Painters, Yale University Press.
Spence, M (1973), “Job Market Signaling”, Quarterly Journal of Economics, 87, 3, 355-74.
1 For instance, an articulated ranking was stated at the beginning of the century by Vincenzo Giustiniani, a famous art collector, intellectual and a patron of Caravaggio. In a letter, he distinguished 12 “categories, concerning the methods of painting and the rankings of painters” with a clear hierarchy. The worst three categories, or “methods” concerned copies. At a higher level of Giustinani's ranking were still lifes and portraits. At an even higher level he placed different kinds of landscape paintings. The best categories were about figurative paintings, including battles and, a step above, historical subjects divided in subcategories differentiated only from a stylistic point of view.
2 The hierarchy of genres became a source of intellectual debate in the European art academies as the Accademia del Disegno in Florence, the Accademia di San Luca in Rome or the Académie des Beaux-Arts in Paris. A shared view was codified in a famous lecture given by the art critic André Félibien at the French Academy in 1668. His influential hierarchy of the genres, ranked still lifes in the lowest position and figurative paintings at the highest level.
3 We found that frescoes were paid 40% less per meter square than oil paintings, but we should keep in mind that they were also painted more rapidly, therefore we cannot draw easy conclusions on the relative profitability of the two techniques.
4 See Etro and Pagani (2012), summarised in Etro (2010), for a general discussion of these determinants.
5 As well known, the idea of costly signalling goes back to Spence (1973).