'The Scream' Sale Could Continue Global Art Shift

As nations try to establish artistic centers, competition for art pushes prices ever higher.

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For lovers of moody expressionist depictions of psychological angst, it's a once-in-a-lifetime event. On May 2, Sotheby's will auction off one of the four main versions of Edvard Munch's The Scream—the last privately owned version of the famous masterpiece.

There are few who can hope to compete in the bidding for the pastel-on-board work. It is expected to go for at least $80 million, but to a certain class of buyers, the actual worth is priceless. For cities hoping to soon be among major world art centers, purchasing such a renowned piece would be a big step in that direction.

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"If you want to build a world-class museum, which is what Qatar and Abu Dhabi are doing and the Chinese government is doing in Beijing, when you think of a museum you think of an iconic work," says Don Thompson, author of The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art. "If I say 'Louvre,' you think of one painting, right? So you need something like that."

Qatar is among the most talked-about potential bidders for The Scream as it attempts to fill out its art collections. The country spent $250 million on Paul Cezanne's The Cardplayers earlier this year—the highest price ever paid for a work of art.

But the international art market is not just shifting in the upper bounds of the stratosphere. Among smaller private collectors, the market is also shifting, particularly toward China.

"The increase in the number of Chinese billionaires (and millionaires) has led to an increase in demand for fine art. I've witnessed this myself at art auctions." says Carol Marie Boyer, Associate Professor of Finance at Long Island University, in an e-mail.

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The Chinese are at the top of the art world, in terms of both buying and selling. According to artprice.com's Art Market Trends 2011 report, China was the No. 1 country in terms of fine art auction sales revenue, with 41.4 percent of that revenue, to the U.S.'s 23.6 percent and the United Kingdom's 19.4 percent. And of the 10 top-selling artists in 2011, six were Chinese.

For all their prolific spending, what are these buyers getting? China's growing upper crust, as well as buyers worldwide, are sometimes seeking out pieces that are as much investments as collection pieces. For them, asset appreciation and artistic appreciation can go hand in hand.

"The people who invest in art stick in the range of $50,000 to $1 million. ... Basically it's a beauty contest. You're trying to choose an artist who will be more popular five years from now," says Thompson.

Even for those who plan to keep their art, value can be important.

"Most private collectors do not intend to sell, though they are invariably delighted if the value of their collection, or at least some pieces in their collection, appreciate in price," e-mails Bruno Frey, full professor of economics at the University of Zurich.

As for what those returns look like, the art world has its ups and downs like any stock market. Recently, the market has proven resilient. As the Financial Times reported earlier this year, the Mei Moses Fine Art Index, a popular index of art values, shows that art has far outpaced the S&P 500 over the last decade, with an average annual return of 7.8 percent compared to 2.7 percent for the S&P.

However, like market, art is subject to substantial volatility. According to the Mei Moses index, art grew at an annual rate of over 30 percent from 1985 to 1990, but then went on to fall by 65 percent from 1991 to 1995.