Showing posts from December, 2016

How is the value of an oil painting determined?

Many wonder at the huge price of works of arts like some oil paintings on Canvas that are auctioned by leading auction houses from time to time while they find other works of art in a flee market going for a few dollars, some that seem just as nice or nicer.
How is the value of a work of art fixed? An answer to this can be found if we go back to the beginnings of human civilization. At first, humans traded goods in kind, for example a sack of grains for an animal skin. In time however humans invented coins and currency that were easier to carry to the market. A sack of gain was considered equivalent to a certain number of coins as was an animal skin. Thus based on the demand and supply of goods, monetary values were determined for all the things humans need.
The invention of money also permitted humans to accumulate and store wealth in a compact manner. In time similar values became associated with precious metals such as gold and silver, precious jewels etc. that do not rust or cor…