1
Awards as drivers to success
in the visual arts
University of Amsterdam | Amsterdam Business School
Executive Programme in Management Studies
MSc Business Studies
Thesis Supervisor: Msc. M. Kackovic
by
Marleen de Kluizenaar Student: 10317287
2
ABSTRACTAwards are an important signal of quality, especially in a market where value is difficult to determine due to insufficient information prior to consumption, as in the visual arts market. With this paper we measure the effect of winning an award on the economic success of the visual artist and if winning more than one award has an even stronger effect on economic success than winning one award or no award. The empirical setting is the visual art market in the Netherlands. Economic success will be measured by the number of sales in the artists career and further differentiated in three major points of sale in the primary art market (corporate, museum and private collection). Further focus will be put on the selection system theory in which the influence of the compositions of the jury is measured. Does the composition of one jury have more effect on economic success of the visual artist than other jury compositions? A distinction is made in market, peer and expert jury and an additional emerging category of combined peer and expert jury, which we name hybrid. Results from this research propose a strong positive relationship between winning an award and economic success, also when winning more than one award. However no significant results were encountered for the effect of jury composition on economic success of the visual artist.
3
INTROAwards ceremonies are hot! This can clearly be observed by the amount of televised big awards ceremonies and other large gala settings and also by the large amount of smaller organizations who all are attracting attention for their activities or cause. In nearly all different aspects of society: sport, art, culture, media, social, science and business prizes are awarded. These prizes and awards celebrate their industry and their prize winners. Awards ceremonies have an influence on the attention that is created towards a product and the way the product is valued, but also help to create categorization and influences the interactions and connections of the players (Anand and Watson, 2004). The
omnipresence of awards ceremonies has filtered through all layers of society and is now seen as an important tool to distinguish oneself from others, using the award as a signal of status, and functioning as a source of motivation (Frey, 2006).
One of the best known is the yearly movie industry ceremony ‘The Oscars’, which is officially named the "Academy Award of Merit" (www.oscar.org). As a spectator watching the ceremony we see the nominees and prize winners, but we do not see how this merit is decided on, what decisions or choices the jury are governed by and why this jury is chosen? Aside from the obvious joy of winning an academy award we would want to know what effect the winning an award has on the winners. For the movie viewers the Oscar’s serve as a signaling device to indicate which movie is worth visiting and
subsequently for the box office additional revenue (Nelson, Doniheu, Walman and Wheaton, 2001). But much more research has been done into the effects of winning an award, inter alia by : Anand and Watson, 2004; English, 2005; Frey, 2006; Gemser, Leenders and Wijnberg, 2008; Hendricks and Singhal, 1996; Meyer and Rowan, 1977; Rao, 1994.
4
The art sector is particularly interesting as it is concerns products of which it is difficult to ascertain the quality, and thus the value for the end consumer, as the consumer benefit is not clear before use (Caves, 2000; Priem, 2007). According to Caves (2000) this difficult to ascertain economic value is inter alia due to uncertainty in demand, the utility artists derive from their work or “art for art’s sake” and the diversity of products and skills creating an infinite variety of products. An often applied tool to measure quality is reputation, especially when this quality and thus value is difficult to assess (Goode, 1978; Rao, 1994; Ezparza and Rossman, 2008). In building on one’s reputation, award ceremonies are useful tool to legitimize the award giving organizations with itsparticipants and public. The high ceremonial value reflects its prestige, newest and latest thinking and makes the organization look more favorable (Meyer and Rowan, 1977). Meyer and Rowan (2007) show that organizations in the cultural field cannot just depend on efficient coordination and control of productive activities, but are strongly dependent on the legitimization by the environment. The advantaged of being affiliated with a group or network can help in building a reputation (Podolny, 1993; Podolny 1994; Rao, 1994). Pierre Bourdieu (1983) in his considerations in “the field of cultural production”, stated that the arts and literature most clearly demonstrates the heuristic effect of relational thinking. With this he indicated that no cultural product exists by itself, each position in the field is relative to other positions and depends for its existence on the other positions in the field (Bourdieu, 1983). The production of culture develops and is shaped within the system or field it functions (Hoffman, 1999; Peterson and Anand, 2004).
According to English (2002) “Award ceremonies are rituals of symbolic exchange, requiring of all participants acknowledgement of and respect for the conventions attendant upon the giving and receiving of gifts.” The economy of prizes and awards English (2005) names “the economics of cultural prestige”. These economics of awards
5
are embedded in a network that creates value by attraction of attention, engaging interactions across the field and giving judgment on worth and awards (Anand and Watson, 2004). Awards provide opportunities for artist to increase their scope, establish their position in the field and the value and notoriety that the award organization carries for the artist are relevant for the economic spin-off following their winning of such an award. (English, 2005). The notoriety of the award giving organization can be influenced by the composition of its jury (Gemser, Leenders and Wijnberg, 2008).The selection system theory focuses on the structure of competitive processes and the way values are attributed to the products and producers (Ebbers and Wijnberg, 2012; Gemser, Leenders and Wijnberg, 2008; Priem, 2007; Wijnberg, 2004; Wijnberg and Gemser, 2000). To successfully compete one’s product must seen as valuable (Mol and Wijnberg, 2007). Gemser, Leenders and Wijnberg (2008) argue that consumer’s value awards at different degrees of credibility, and this value is related to the selection of the award jury. They examined the impact of various types of jury composition on the winning of an award, by dividing this jury in three categories: Market based, peer based and expert based, and measuring their difference in effectiveness. The jury composition thus can influence the credibility of the award and therefore can influence the effect of the economic success for the prize winners.
The objectives of this research are to gain insight into effect of winning an art award on the success of the visual artists. In the Netherlands recent governmental policy has implemented plans changing the extensive system of support for culture and the arts in the Netherlands. The “Raad voor Cultuur” advises the Dutch government on art, culture and media and calls for the necessity for the artist working in the art sector to become more sustainable and to reinvent themselves in their financial dependency (Raad voor
6
cultuur, 2013) Winning an award could, by increasing potential sales, contribute to this financial independence.In measuring what makes an artist more successful than another we have taken financial success in terms of number of sales as criterion, this will be measured by the amount of sales in the primary art market in the years 1990 to 2008. By going further into the research of the effect of winning an awards it is necessary to consider which composition of the award jury has a the greater influence on the economic success of a visual artist. The awards organizations are differentiated by the selection system that is applied to the jury selection, this composition of the award jury is consumer, expert or peer based (Priem, 2007; Gemser et al, 2008; Wijnberg, 1995, 2011; Wijnberg and Gemser, 2000). The empirical setting of our analysis is the visual arts market in the Netherlands, and focuses on artists who attended the Royal Dutch Academy for Visual Arts (Rijksakademie van Beeldende Kunst, RABK) in Amsterdam.
The thesis will first approach the economics of winning an award with a review of the literature and lead to the formulation of hypotheses on the effects of winning an award on the economic success of the visual artist. From these results we will go further in differentiating the effect of the jury composition on the winning of an award based on the literature. After explaining our empirical setting, methodology and presenting the results from this researched data, the thesis will end with discussion and conclusions and with this hope to contribute to the research gap specifically applicable to visual arts and build on the existing research into awards.
7
THE ECONOMICS OF AWARDSIt has been a popular and romanticized presumption that artists do not want to perceive themselves as economically driven (Bourdieu, 1983; Eikhof and Haunschild, 2007; Becker, 1982) and are prepared to make personal and financial sacrifices in order to achieve their artistic goals. But today there are successful artists (Jeff Koons and Damien Hirst, both prize winning artists) who appear to take pride in not just their artistic
success but also their financial success. However it has also been perceived that being too concerned with financial rewards can be detrimental to the appreciation in the cultural field (Caves, 2000) thus it is important to achieve an understanding of the goals which are pursued. According to Voss, Cable and Voss (2000) goals and success in the arts can be obtained along different dimensions of rewards and can motivate the
production of great art which is recognized by peers, donors and institutions (Voss et al., 2000). This organizational success does not have to depend on efficient coordination and control of production processes, but success is also the result of legitimization by the environment (Meyer and Rowan, 1977). Rao (1994) discusses how awards legitimize organizations and create a reputation. He names it “explaining” the organization to consumers, investors and competitors. This environment plays an important role in the giving and receiving of awards as the awards have different benefits for different parties involved. On the one hand we have the economic interest and the financial rewards due to recognition and acknowledgement of the awards and its winners and on the other hand there is simply the prestige of winning (English, 2005).
According to Sorensen and Rasmussen (2004) there is an informative effect, how many people know the book and the persuasive effect, how many will buy it, and the change (influence) caused by the review. With this model they propose to measure the impact of
8
book reviews on book demand, and they found that in the case of book reviews “any publicity is good publicity”. It could be argued that any award like reviews can create attention and any attention given to an artist or art work can only lead to a raiseawareness of the product. It provides the consumer with information they may not have had beforehand. Thus raising the amount of consumers that are now familiar with the product, which were first not (English, 2005).
Determining value of artistic production is a major obstacle in the artistic field, as on the production side the intrinsic value is not always determined by production value but more even artistic value (Bourdieu, 1983) and on the consumer side artistic the value of
artistic products is difficult to determine before consumption (Caves, 2000; Priem, 2007). The artistic production seen as experience goods cannot be valued by the consumer during the search process as the information is difficult to obtain (Nelson, 1970) and thus the evaluation of the product is strongly influenced by the role of the evaluators and thus at the same time these evaluations can increase the efficiency of the market (Kwon and Easton, 2010). If quality is hard to determine by lack of economic measures, the social constructed status and interactions can become important in determining value, and awards rituals can be an important means to help define this value (Ezparza and Rossman, 2008).
Anand and Watson (2004, p60) asked: “why do awards ceremonies exist and what is their purpose?”. In answering this question they researched the importance of awards ceremonies as mechanism for “shaping organizational fields”, this field represents different levels horizontally or vertically connected through the product and develops through the intertwined activities of a diversity of organizations. With their case study into The Grammy award they show that awards can be influential in different processes,
9
such as strengthening linkages and relationships, raising prestige and grabbing attention of the field. Their analysis showed that the influence of the Grammy award on peripheral and dissimilar actors served as a “transorganizational structure” that strengthened and deepened the relationships between the constituents (Anand and Watson, 2004).Through the research into movie awards it has been ascertained that awards are an important signaling device for quality in the industry (Nelson et al., 2001; Deuchert, Adjamah, and Pauly, 2005; Gemser, Leenders and Wijnberg, 2008). Awards are “seals of approval that can help firms to reach legitimacy and credibility.” (Gemser and
Wijnberg, 2002, p. 68). There is a direct result through the winning of a prize in the value of the prize and creating a competitive advantage over other artist in
differentiating itself through perception of its “quality” of work (Gemser and Wijnberg, 2002; Gemser et al., 2008; Rao, 1994). The value of the awards can differ in its perception on the value to the prize winner, the competition or the value is a signal of quality to the consumer (Gemser and Wijnberg, 2002). Consumers can be capable of easily changing their opinion in view of new information and attitudes towards choices are mainly risk averse (Kahnemann and Tversky, 1979; Rao 1994) and the choice for certainty can be strengthened by the adoption of the artist by the awards organizations. Winners are better than losers and the contest structure of the awards ceremonies can embody this perception and thereby validating the winner (Rao, 1994).
If there is high social uncertainty, institutions and actors use mimicry and linkages to legitimize their work and get accepted, they will model themselves to other organizations in the field that they perceive as more successful (DiMaggio and Powell, 1983). Di Maggio and Powell (1983) elaborated on an isomorphic process that causes actors in the field to model themselves to others who are perceived as more successful and thus creating a
10
new homogeneity. Awards do not only define what is valued , but by extension can also define what will be produced (Ezparza and Rossman, 2008). Artists featured in the Grammy awards consequently can not only make and sell more music, but therefore also have a stronger influence on music that is produced, distributed and marketed (Anand and Watson, 2004).From the literature pertaining to the research into award giving it could be expected that winning an award will have a positive financial effect for the award winner, and thus this will also hold for the visual arts. The first hypothesis which will be tested is therefore:
Hypothesis 1 (a): Winning an art award has a positive effect on economic success of the visual artist in his/her career.
In general quality is positively related to success, but the problem lies in the
predictability of the outcome. This unpredictability lies in the choices that others make and the influence this has on their own choice (Salganik, Dodds and Watts, 2006). If this outcome is related to winning an award, the rewards could be greater when winning more awards as the choice of the winner could lead to other choosing a similar winners. The outcomes of winning again lead to even greater exposure and success a winner-takes-all phenomenon (Frank and Cook, 1995).
Adler (1985) argues that if all artists are equally likely to succeed and there is a time lapse between when first consumers choose their star and this slight majority would snowball the artist into stardom. Adler believes that this first choice is due to luck as the consumer is not knowledgeable to choose on quality and consumers economize on learning. Rosen (1981) stated that talent can lead to higher income and greater success
11
and that talent has a multiplier effect on reward. When mapping quality to success this leads to a convex curve, meaning that even small differences in quality can result in large differences in success. This is known as a superstar effect (Rosen, 1981). This superstar phenomenon is described by Rosen (1981, p 845) as a "relatively small numbers of people earn enormous amounts of money and dominate the activities in which they engage". This phenomena can be attributed to the fact that talented artist gravitate towards larger markets increasing their scope and furthermore imperfect substitution causes the lesser talent to be a poor substitute for greater talent (Rosen, 1981).It is suggested by Rao (1994) that certification contests help legitimize organizations and that winning this contest can enhance a reputation for competence for the winner. In researching the American auto industry Rao wanted to test if the hypothesis that
cumulative victories would lead to an even greater effect on reputation and therefore improve their survival prospects. Rao (1994) found that the increased number of victories significantly reduced exit rates. Based on these findings we therefore wish to test this hypothesis in the visual arts and deduce the following hypothesis:
Hypothesis 1 (b): Winning more than one art award has a greater positive effect on economic success of the visual artist in his/her career than winning one award or no award.
12
SELECTION SYSTEMThe selection system is about the processes of competition, the competitive arena and specifies the relations between the selected and the selectors and the actor who play a role in this field, this selection system separates winner from losers (Wijnberg, 1995; Gemser and Wijnberg, 2002). One approach to differentiating awards organization was researched by Hendriks and Singhal (1996), who differentiated between independent and dependent organizations that are presenting the awards to firms of which shares are traded on the stock market, they found that awards granted by independent
organizations had more effect on the buying behavior of consumers. The selection
system in art awards can be seen by the system by which works of art are judged by the selection committee and the reputation of the award is influenced by its institutional characteristics and its choice of selections system and the level of fit to the dominating selection system in the industry (Gemser et al, 2008).
Award organizations chose a selection system and consequently they will chose their winners through a jury and judging system based of these selectors. The selection systems that can be distinguished are the market selection, peer selection and expert selection (Wijnberg, 1995; Wijnberg and Gemser, 1999, 2000; Priem, 2007). As discussed by Wijnberg and Gemser (1999) Market selection is characterized by a non professional jury seen as consumers and the winner can be chosen through public vote. In the peer selection the jury is composed of jurors that are active in the same field as producers or consumers of the art works. Expert’s selection boasts a jury with specific knowledge about the prize category (Wijnberg, 1995; Gemser and Wijnberg, 2002). Wijnberg and Gemser (2000) signal a rise in expert selection in recent decades and the
13
subsequent attribution to the perception of quality of an artwork, against a market force determining values.Awards as signal has proven that it works. In measuring the effectiveness of awards as signaling device, they can be seen as setting the value standard for the quality of the product. (Deuchert et al., 2005; Gemser, et al., 2008; Hendricks and Singhal, 1996; Nelson et al., 2001).The selection system theory focuses on these values attributed to the products and producers. As discussed earlier this is difficult to determine before consumption for artistic products and the award giving organization is thus functioning as a signal to the ultimate consumer (Priem, 2007; Gemser et al, 2008). Gemser, Leenders and Wijnberg (2008) argue that consumer’s value awards at different degrees of
credibility, and this value is related to the selection of the award jury and they examined the impact of various types of awards. They tested their hypothesis in the Film industry and found that awards differ in effectiveness and consumers can be influenced by the source credibility and salience. Prominent awards are likely to have more influence than awards with lesser reputations (Gemser and Wijnberg, 2002). This reputation can rely on the source and credibility of the information and the jury can be seen to reflect this credibility as consumers will often pick products that comply with their own judgments and sense of values. Jury composition is most effective if the selection system is representative of how consumers select their products (Gemser et al, 2008).
Wijnberg and Gemser (1999) discuss the different selection systems in a historic perspective and analyze the shift in jury composition, they focus on the impressionist painters as example. The impressionists used their power as group to create value and interest in their works, and it helped them create a change in the selection system dominant in that period in the arts. The selection system can thus be seen as an
14
instrument which influences the competitive process (Wijnberg, 1995; Wijnberg and Gemser, 1999; Gemser and Wijnberg, 2002).In reviewing the different jury selection systems and in accordance with the secondary data acquired on visual art awards in the Netherlands, hypothesis will be formed for these different jury compositions.
Market selection is often the most common and familiar to large consumer group as the consumer plays an active role in selecting the prize winning product or producer, and the value is determined as direct result of the vote (Priem, 2007). The process of winning is quite straightforward process of voting and winning and therefore our first of the four part hypothesis is:
Hypothesis 2 (a): Winning an art award with a jury consisting of a market selection system has a greater positive effect on economic success of the visual artist than other jury selection systems.
The peer jury is composed by artists and thus the artist selects artist. The status of the actors involved with other actor results in choosing actors they would relate themselves with, and they would not chose lower status actors as this could threaten their own status (Ebbers and Wijnberg, 2010; Benjamin and Poldolny, 1999). A perspective on the peer and expert jury composition and their consequential choice in winners is than under the influence of homophily. The awards organization will choose jury members which are similar to them in values, attitudes and beliefs but also status (McPherson, Smith-Lovin and Cook, 2001). The Peer jury could be sensitive to this social phenomenon as the jury is similar in its status and often included in their social network. This similarity can
15
influence the similarity in choice jury members make, but homophily can also be an important factor in the formation of a jury, and the ties they have and therefore controls the outcome. The formation of these ties can be unconscious and be explained by the need to reduce uncertainty (Nelson, Tracey and Karra, 2013).And the strong relation between artist and his peer could be based on this mutual recognition and creation of relationships, and these relationships are good for business (Ezparza and Rossman, 2008; Nelson et all., 2013). The second hypothesis therefore is:
Hypothesis 2 (b): Winning an art award with a jury consisting of a peer selection system has a greater positive effect on economic success of the visual artist than other jury selection systems.
In the research by Gemser, Leenders and Wijnberg (2008) on the movie industry it was found that only when differentiating between mainstream and independent movies the expert jury was most effective for these independent or art-house movies. As most visual art is not mass produced and the knowledge of the product demands some effort of the consumer one could argue that these findings would also reflect on the visual arts. As Reinstein and Snyder (2005) found that reviews have a positive effect on box-office revenue, but this relationship is stronger for art-house movies than for mainstream movies, possible due to the value that the consumer gives to the critic writing the review is seen as the expert. But more important in the primary art market is the necessity to be innovative and this has become the dominant criteria in recent years. The role of the critic has increased as the measure of innovativeness is difficult to ascertain and the expert jury is seen as to have the credentials to make this judgment on newness and therefore artistic value (Wijnberg and Gemser, 1999). Thus the next hypothesis would be formulated as:
16
Hypothesis 2 (c): Winning an art award with a jury consisting of an expertselection system has a greater positive effect on economic success of the visual artist than other jury selection systems.
There are complications in determining the selection system: the composition of the jury members can be a mix of the different selection systems, can be influenced by choice of jurors from their own network or the selectors may be representing different interests than was presumed (Caves, 2000, 2002; English 2002; Ebbers and Wijnberg, 2010), and if the selectors are interconnected they may be competing among each other on the status they achieve in their role as jury member and this threatens his or her authenticity as selector (Mol and Wijnberg, 2007). Caves (2000) discusses the risks of selectors and the incentives that motivate them. The alliances selectors seek are significant for the value that is attributed to the selected (Mol and Wijnberg, 2007). As Ezparza and Rossman (2008) pointed out that collaborations with an Academy member greatly increases recognition, and can be advantages to success. Therefore choosing selectors from different fields and disciplines could alleviate this risk of favoritism.
Sharon Norris (2006) found in her research of the jury for the Man Booker prize that there was a strong interconnection between judges and between judges and authors. Consequently the Booker prize introduces jury members who had no relation to the literary world to break with the interconnections. In view of her observations a mixed jury might be perceived the strongest jury composition to regain autonomy (Norris, 2006).
17
During the research into the different jury compositions for visual arts in the Netherlands it was found that many juries now consist of a mixed jury with peer and expert jury members. Therefore our last hypothesis is:Hypothesis 2 (d): Winning an art award with a jury consisting of an hybrid (expert and peer) selection system has a greater positive effect on economic success of the visual artist than other jury selection systems.
THE EMPIRICAL SETTING AND DATA
The empirical setting of our analysis is the visual arts market in the Netherlands comprising: drawings, paintings, sculpture, installations, photography, video and film, and other miscellaneous art disciplines. This visual art market can be subdivided in primary and secondary art market. The primary market encompasses all sales directly from the artist. Whereas the secondary art market is where the art is resold, thus one could presuppose that the primary market is has a strong influence on sales and values. The primary art market by endorsing an artist or artwork can give a signal to the
secondary market on the quality of the work (Gerard-Varet, 1995). The primary art market is commonly dominated by a demand for evaluative judgment, which increases the efficiency of the market (Kwon and Easton, 2014). This research focuses on sales in this primary market, and will not only look at total sales, but also regard a subdivision in corporate collection buyers, museum acquisitions and private collectors, as these are the main points of sale in this market.
For the art market in the Netherlands the total amount of awards for art and culture has grown between 1978 and 1998 from 156 to 555. This surge in growth of awards
18
the Oscars (film) and Grammy (music) and increasing awards popularity under a larger audience due to extensive media attention (Frey, 2006). In the following years it has continued to increase to a maximum of 748 in 2002. Momentarily it fluctuates around 700 (www.dutchheights.nl). The awards organizations have recognized the exposure created by the awards and the power of engaging attention for themselves and the artists. The highest prize amount is being paid out by the Prins Bernhard CultuurfondsPrijs for the total prize to the value of € 150.000. The Prix de Rome consider themselves
to be the most important visual art award giver in the Netherlands with a long international history. With their awards they aim to stimulate the artists to further develop themselves, to create awareness under a larger public for contemporary art and the winning artist (www.prixderome.nl). At the time of this research there are at least 43 prizes for the visual arts being awarded for individual artists.
This research will be based on two sources of secondary data. The first source of the secondary data has been collected from visual artist graduated from the Royal Dutch Academy for Visual Arts. (Rijksakedemie van beeldende kunsten, RABK) in Amsterdam. The RABK applies a rigorous selection of exceptional talented artists and offers them a two year residency with excellent educational facilities to stimulate the creation of innovative and cutting edge art. A residency at the RABK can lead to an international career producing art which will be sold and exposed around the world. The RABK actively tracks its alumni and gather information regarding each artist’s career through collection of publications, newspaper clippings, awards winnings, reviews of exhibitions and art shows and gallery information (this data was verified through independent sources: artists website, artnet.com and artfacts.net). Information was collected on the individual artist and his/her performances in the period from 1990 to 2008, and the final sample amounts to 542 visual artist.
19
The second source of secondary data is collected from the website www.dutchtheights.nl and www.galeries.nl listing all Dutch art prizes and their winners. A list of all current visual art awards was prepared looking into details such as the jury composition, types of pre-selections and prize amount and frequency. This served to ascertain the composition of the jury as we will use the selection system theory which distinguishes the different types of selectors. In this research the art awards jury is a consumer, peer and expert based jury selection (Wijnberg, 1995; Wijnberg en Gemser, 1999; Priem, 2007; Gemser et al.,2008). Some visual art awards were collected that are no longer awarding any prizes, but only the awards organizations were used when there was information on the jury composition. During our research the peer/expert jury was the only type ofcombined jury, therefore we named this fourth jury: the hybrid jury. In all 58 different visual art awards were found of which the jury composition was known.
METHOD
In order to test the hypothesis the Statistical software Package for Social Sciences (SPSS version 22) was used. To start with we tested the distribution of the data to assess the probability distribution. In performing a moderation analysis, a Generalized Linear Model (GLiM), such as the Poison model will be the appropriate probability distribution measure as we are using count data, with values greater than 0 and the data is probably non-normally distributed. However a characteristic of the Poisson distribution is that the mean is equal to the variance (Cameron and Trivedi, 1990). In these sales figures a possible large number of zero response and strong positively skewed and kurtotic results are expected. Therefore the poison model is not suitable. The Negative Binomial GLiM would probably be more suited, which is applied when the observed variance is greater than the mean, causing overdispursion (Cox, West and Aiken, 2009; Cameron and Trivedi, 1990). We will measure the exponentiated coefficient Exp(B) to show the incident rate ratio as
20
this will show the strength and direction of the relationship (0 > 1 inverse relationship, 1 neutral relationship and >1 positive).The dependent variable is the economic success as a count variable measuring the artists’ number of sales in his career. We subdivide these sales for the primary market in the different points of sale. In testing our models we distinguished the effect of winning on total sales, corporate collection sales, museum sales and private collector sales. From the data collected from the artists, 994 total sales were counted over the period 1990 to 2008.
In researching Hypothesis 1(a) the independent variable is the winning of a visual art award. Discriminating between winning or not winning an award. In order to analyze the effect on economic success a GLiM will be used to assess whether award winners sell more than non-award winners.
In Hypothesis 1(b) an extra distinction is made for artists winning more than one award as to establish if winning more than one award has a stronger effect than winning one award or no award. We measure this by creating three groups, in which one group has not won an award, one group has only won one award and the other group has won multiple awards. The group was composed of 152 artists won more than one award , 122 winning just one award and 268 artists did not win an award.
Hypothesis 2 (a, b, c and d) further assesses the influence of the jury selection in the awards organisation on the measure of economic success. The independent variables used to test the model are the market, peer, expert or hybrid (a jury composed of peer and expert jury members) based jury selection and these variables will be used mutually exclusive. During the count of the jury composition we counted 58 awards of which only
21
4 are market, 7 are peer and 36 expert based juries, however a new group prominently surfaced, the hybrid jury with 11 counts on jury composition.In our generalized linear model we will include 5 control variables. The First being the age when the artist starts at the academy, which is surprisingly widespread, and is a reflection of the academy criteria for acceptance as they expect a certain level of
professionalism to be achieved. The second is the total amount of reviews. Reinstein and Snyder (2005) showed that considerably more consumers chose a movie due to positive reviews. The effect was even stronger in the small segment of drama and movies
released in limited amount, for these highbrow consumer, with higher expectations of the information and value from the reviewer we could see a relationship to the art world, and the effect should thus be considered. Reviews can be seen as third party endorsements and the art critics and gallery owners making the choices are concerned about retaining their reputation and their credentials in their ability to spot the next best thing (Wijnberg and Gemser, 1999, 2000). Therefore we will include the artists number of gallery
affiliations and the amount of solo exhibition to our controls. And the final control
variable will be the principal artistic discipline in which the artist is active, we differentiate in: drawings, paintings, sculpture, installations, photography, video and film, and
miscellaneous. These were coded as dummy variables. All control variables and their descriptive can be found in Table 1 in the appendix
RESULTS
The results of the sales (GRAPH 1) were not normally distributed and positively skewed. From the descriptive statistics in TABLE 1 (appendix) we can see that the range for the total amount of sales was from zero to 51, with a mean of 1,83 with a deviance of 5,089.
22
In order to test our hypothesis a negative binomial probability distribution was used (Cameron and Trivedi, 1990; Coxe et al., 2009).GRAPH 1
TABLE 2 in the appendix shows the correlations matrix. The results show several
significant correlations for nearly all the variables used in relation to total sales. The jury composition did not show any significant correlation in relation to total sales. Some signals of multicollinearity are visible (TABLE 2) as with gallery affiliation and solo exhibitions, and we tested further for multicollinearity by measuring the Variance Inflation Factor (VIF) in SPSS, this showed no further signs of multicollinearity and they were not excluded from the test. However hybrid awards and expert awards did show signs of multicollinearity and therefore they were tested separately, thus not in the same model. As is to be expected there is multicollinearity between awards yes/no, awards more than one and total number of awards, therefore total number of awards was not included when testing these models.
23
Several negative binomial models were applied to test the effect of the variables on the total number of sales of the visual artist during his/her career. These models were also applied for the effect on corporate sales, museum sales and private sales. In testing the strength of the variables in a stepwise regression, the effect on sales of all control variables was measured for total sales (994) and the subdivision in the largest number, corporate sales, with 759, museum sales, with 207 and private sales, with only 27 sales. The results for these regressions showed that reviews have a significant effect on all sales. We found that the artist academy age was not significant in any of the sales (contrary to the correlation matrix) and the number of solo exhibitions to total sales (p<0,10) and strongest in museum sales (p<0,001), and gallery affiliation on total sales (P<0,10) and strongest in corporate sales (p<0,01) and total number of awards was found significant in all sales (p<0,001 except private sales p<0,10) (it must be mentioned that private sales only represented 2,8% of total sales).In testing for the effect of winning an award on the economic success of the visual artist in his/her career Model 1(a) i.e. Hypothesis 1(a) with a negative binomial model with a log link we found that the positive correlation is significant (p<0.01) and found the incident rate ratio Exp(B) is 2,771 for total sales which suggests a strong positive effect of winning an award (TABLE 3). This result was significant for total, corporate and museum sales , but again the effect on private sales is not significant.
Model 1(b) i.e. Hypothesis 1 (b): measures the greater positive effect of winning more than one art award on economic success of the visual artist in his/her career (TABLE 3), with 152 artists winning more than one award and 122 only winning one award and 268 not winning an award. Winning more than one award was significant (p<0,001) for all sales. And the winning of one award was strongest in total and corporate sales
(p<0,001) and also for museum sales (p<0,01). When regarding the incident rate ratio the effect of winning more than one award is stronger than when only winning one
24
award, however we did not test separately for the effect of winning more than one award against one award .In testing the influence of the jury composition we tested individually each jury
composition against all other jury compositions. So testing for each Hypothesis 2 (a, b, c) and subsequently for 2 (a, b, d) with a generalized linear model (TABLE 4). Because the jury composition was not known for all the award winners the sample value is N=127, and as some artists have one more than one prize we chose the prize with the highest financial reward as the prize to relate to the jury composition. This lead to the following distribution of jury composition for the award winners:
In testing Hypothesis 2(a, b, c and d) we found that in winning an award from one jury composition does not significantly have a greater effect on the total sales of the visual artist than from other jury selection systems. This effect is not only valid for all the sales, but also for corporate art sales, museum sales and the private sales. These results
comply with the results in the correlation matrix. When testing for robustness the influence of the control variables has a strong moderating effect on the model. When testing for the control variables the significance of the model increased, but not enough to result in a significant effect. Thus we must conclude there is no evidence to support hypothesis 2 (a, b, c and d).
Categorical Variable
Information N Percent
Jury Selection System jury_market Martket Jury 1 ,8% Other jury 126 99,2%
Total 127 100,0%
Jury_peer Peer Jury 18 14,2%
Other jury 109 85,8%
Total 127 100,0%
Jury_expert Expert Jury 53 41,7% Other jury 74 58,3%
Total 127 100,0%
Jury_hybrid Hybrid Jury 55 43,3% Other jury 72 56,7%
25
DISCUSSIONS AND CONCLUSIONSThere are contradicting opinions on how much research in the cultural field has been done. Some mention extensive literature as available (Gemser et al, 2008) although others complain on the lack of research in the cultural field (English, 2002; Frey, 2006). Also the research has either concentrated on a high economic value approach with weekly box-office data as outcome to measure success (Nelson et al., 2001) or a highly social approach to value and worth (Bourdieu, 1983; DiMaggio and Powell, 1983; Anand and Watson, 2004). In this research the focus is on the perspective of the artist and what the value of winning an award can have on his/her career.
The results from this research show that winning an award shows a significant effect on the economic success of a visual artist, therefore we find support for hypothesis 1(a): Winning an art award has a positive effect on economic success of the visual artist in his/her career. We can conclude that Awards help legitimize and increase the credibility of the award winner and consequently his success. This corresponds with the findings in similar research in different creative industries (Nelson et al., 2001; Anand and Watson, 2004; Gemser et al., 2008, Gemser and Wijnburg, 2002). We can also find significant support for our second hypothesis and therefore conclude that winning more than one award does have a positive effect on economic success. This inter alia complies with the findings by Rao (1994) when testing exit rates in the American auto industry, Rosen (1981) on the superstar effect and the research by Frank and Cook (1995) on their winner-takes-all outcomes.
One of the objectives of this research was to find support for the importance of the jury composition and the subsequent effect on the economic success of the visual artist. By differentiating the awards into the different jury selection types we hope to prove that one jury has more influence than the others. However none of the results were
26
significant and we must therefore conclude that this research did not find any significant attribution of effects caused by one jury against another jury. Inconclusive results are not warranted when regarding the research on selection system theory, the visual arts market however may be too difficult to qualify for this research as we are considering a large diversity of products (Becker, 1982). However it could have been expected to find a positive relationship between the hybrid jury composition and the economic success of the visual artist, as this jury composition is observed in three very important awards in the visual arts: the Koninklijke Prijs voor Vrije Schilderkunst, the Volkskrant Beeldende Kunst Prijs and Prix de Rome Beeldende Kunst. These prestigious award organizations have chosen a hybrid jury composition and in this research it was also the jurycomposition which was most frequent under the winners in our dataset. Further research may warrant a larger sample size from a broader sample group. As the RABK still collects data on its students it could also be possible to repeat this research at a later moment and thus increasing the time frame and sample size.
With the limitations in this research we hope to suggest subjects for further research. One limitation is the other signals of quality which were not to be taken into
consideration, such as more emotional values and symbolic values which consumers attribute to a product and the perception of quality (Priem, 2007). This quality plays an important role in acquiring a reputation, and this reputation has been underestimated in the legitimization of organizations, awards can play an important role in this validation, but at the same time this is socially complex system (Rao, 1994). It remains a
multifaceted perspective into attributing value to the reputation of the award
organization. This would be an interesting field for further research, where the testing on other more emotive and symbolic values attributed to the award winning process.
27
In Conclusion our results show there is a significant and strong effect from winning an award on the economic success of a visual artist and further research could help build on the further understanding of these effects. The Power of awards research in the creative industry could lead to organizational theory that is applicable in all industries and a better understanding of the competitive process (Wijnberg and Gemser, 2000: Wijnberg, 2004). Innovativeness is an important factor in achieving competitive success, and the arts and an artistic product is often valued on its innovativeness and the selection system plays a role in these competitive processes. This innovative behavior and the adoption of these new art forms also change the existing market and become the foundation for new innovations (Wijnberg and Gemser, 1999). This can propose a dynamic view against static view of the importance of awards (Hoffman, 1999) and an interesting perspective for further research could look into how awards implement change.AKNOWLEDGEMENT
I wish to thank Mcs. Monika Kackovic of the Universiteit van Amsterdam for the data, advice, patience, assistance and supervision in the writing of this thesis. And especially my family for their encouragement and support.
28
REFERENCESAdler M. (1985). Stardom and Talent. The American Economic Review, Vol. 75, No. 1, pp. 208-212.
Anand, N. and Watson, M. R. (2004). Tournament rituals in the evolution of fields: The case of the Grammy Awards. Academy of Management Journal, 47: 59-80.
Becker, H. (1982). Art worlds. University of California Press. Berkeley, CA.
Benjamin, B. A. and Podolny, J. M. (1999) ‘Status, Quality and Social Order in the California Wine Industry’, Administrative Science Quarterly 44(3): 563–89.
Bourdieu, P. (1983). The field of cultural production. Poetics, 12, 311-356.
Cameron, A.C. and Trivedi, P.K. (1990). Regression-based tests for overdispursion in the poison model. Journal of Econometrics 46 (1990) 347-364.
Caves, R. (2000). Creative industries: Contracts between art and commerce. Cambridge, MA: Harvard University Press.
Coxe, S., West, S.G. and Aiken, L.S. (2009). The Analysis of Count Data: A Gentle Introduction to Poisson Regression and Its Alternatives. Journal of Personality
Assessment, 91(2), 121–136.
Deuchert, E., Adjamah, K. and Pauly, F. (2005). For Oscar Glory or Oscar Money? Journal of Cultural Economics 29: 159-176.
DiMaggio, P., Powell W.W. (1983). The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. Am. Sociol. Rev. 48:147–60.
Ebbers, J.J. and Wijnberg, N.M. (2010). Disentangling the Effects of Reputation and Network Position on the Evolution of Alliance Networks. Strategic Organization, 8 , (3), 255-275.
Ebbers, J.J. and Wijnberg, N.M., (2012). Nacent ventures competing for start-up capital: Matching reputations and investors, Journal of Business Venturing,
doi:10.1016j.jbusvent.2011.02.001.
Eikhof, D.R. and Haunschild, A. (2007). For Art's Sake! Artistic and Economic Logics in Creative Production. Journal of Organizational Behavior, Vol. 28, No. 5, pp. 523-538 English, J. F. (2002). Winning the culture game: prizes, awards, and the rules of art.
New Literary History, 33(1), 109-135.
English, J. F. (2005). The Economy of Prestige, Prizes, Awards, and the Circulation of Cultural Value. Cambridge, MA: Harvard University Press.
Ezparza, N. and Rossman, G. (2008). I’d like to thank the Academy, complementary productivity and social networks, 27-10-2011 on
http://www.princeton.edu/culturalpolicy/I'd_Like_to_Thank
Frank, R., and P. J. Cook (1996). The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us. New York: Penguin Books.
29
Frey, B. S. (2006). Giving and receiving awards. Perspectives on Psychological Science, 1: 377-388Gemser, G., Leenders, M. A. and Wijnberg, N. M. (2008). Why Some Awards Are More Effective Signals of Quality than Others: A Study of Movie Awards.
Journal of Management, 34(1), 25-54.
Gemser, G. and Wijnberg, N. M. (2002). The economic significance of industrial Design awards: A conceptual framework. Academic Review, 2(1), 61-71. Gerard-Varet , L-A (1995). On pricing the priceless: Comments on the
economics of the visual art market. European Economic Review 39, 508-518
Goode, W.J. (1978). A celebration of heroes. Berkeley: University of California Press. Hendricks, K.B. and Singhal, V.R. (1996). Quality Awards and the Market Value of the Firm: An Empirical Investigation. Management Science, Vol. 42, No. 3 (Mar., 1996), pp. 415-436.
Hoffman, A. (1999). Institutional evolution and change: Environmentalism and the U.S. chemical industry. Academy of Management Journal, 42: 351-371.
Kahneman, D., and A. Tversky. (1979). ‘‘Prospect theory: An analysis of decisions under risk.’’ Econometrica, 47:263–291.
Kwon, W. and Easton, G. (2010). Conceptualizing the role of evaluation systems in markets: The case of dominant evaluators. Marketing Theory10: 123
McPherson, M., Smith-Lovin, L. and Cook, J.M. (2001). Birds of a feather: Homophily in Social Networks. Annual Review of Sociology. 27:415–44
Meyer, J. W. and Rowan, B. (1977). Institutionalized Organizations: Formal Structure as Myth and Ceremony. American Journal of Sociology, Vol. 83, No. 2, pp. 340-363.
Mol, J.M. and Wijnberg, N.M. (2007). Competition, Selection and Rock and Roll: The Economics of Payola and Authenticity. Journal of Economic Issues, Vol. 41, No. 3, pp. 701-714.
Nelson, P. (1970). Information and consumer behavior. Journal of Political Economy 78, 311–329.
Nelson, P., Tracey, P. and Karra, N. (2013). Building entrepreneurial tie portfolios through strategic homophily: The role of narrative identity work in venture creation and early growth. Journal of Business Venturing 28:134–150.
Nelson, R. A., Donihue, M. R., Waldman, D. M. and Wheaton, C. (2001). What’s an Oscar worth? Economic Inquiry, Vol. 39 nr. 1, pp. 1-16
Norris, Sharon (2006). The Booker Prize: A Bourdieusian Perspective, Journal for Cultural Research, 10:02, 139-158.
Peterson, R. A. and Anand, N. (2004). The production of culture perspective. In J. S. Hagan & K. S. Cook (Eds.), Annual review of sociology, vol. 30: Forth coming. Palo Alto, CA: Annual Reviews.
30
Podolny, J. M. (1993). ‘A Status-based Model of Market Competition’, American Journal ofSociology 98(4): 829–72.
Podolny, J. M. (1994). ‘Market Uncertainty and the Social Character of Economic Exchange’, Administrative Science Quarterly 39(3): 458–83.
Priem, Richard L. (2007). A Consumer Perspective on Value Creation. The Academy of Management Review, Vol. 32, No. 1, pp. 219-235
Raad voor Cultuur (2013). Advies bezuiniging cultuur 2013-2016.Noodgedwongen keuzen.
Rao, H. (1994). The Social Construction of Reputation: Certification Contests,
Legitimation, and the Survival of Organizations in the American Automobile Industry: 1895-1912. Strategic Management Journal, Vol. 15, Special Issue: Competitive Organizational Behavior, pp. 29-44.
Reinstein, D.A. and Snyder, C. M. (2005). The Influence of expert reviews on consumer demand for experience goods: a case study of movie critics.
The Journal of Industrial Economics, Vol.53(1), pp.27-51
Rosen, S. (1981). “The Economics of Superstars.” American Economic Review, December, p 845–58.
Salganik, M. J., P. S. Dodds and D. J. Watts. (2006). ‘‘Experimental study of inequality and unpredictability in an artificial cultural market.’’ Science, 311: 854-856.
Sorensen, A. T. and Rasmussen, S. J. (2004). Is any publicity good publicity? A note on the impact of book reviews. Unpublished Working Paper, Stanford University Voss, G.B. Cable, D.M. and Voss, Z.G. (2000). Linking Organizational Values to Relationships with External Constituents. Organization Science.
Wijnberg, N. M. (1995). Selection processes and appropriability in art, science and technology. Journal of Cultural Economics, 19: 221-235.
Wijnberg, N. M. (2004). Innovation and organization: Value and competition in selection systems. Organization Studies, 25(8), 1413—1433.
Wijnberg, N. M., (2011). Classification systems and selection systems:
The risks of radical innovation and category spanning.Scandinavian Journal of Management 27, 297—306
Wijnberg, N. M., and Gemser, G. (1999). Groups, experts and innovation : the selection system of modern visual art. University of Groningen.
Wijnberg, N. M., and Gemser, G. (2000). Adding value to innovation: Impressionism and the transformation of the selection system in visual arts. Organization Science, 11: 323-329.
31
APPENDIX:TABLE 1
N Minimum Maximum Sum Mean
Std. Deviation Total_sales 542 0 51 994 1,83 5,089 TotalCorpArtSales 542 0 49 759 1,40 4,422 TotalMuseumSales 542 0 19 207 ,38 1,372 TotalPrivateSales 542 0 7 28 ,05 ,414 StartAcademyAge 542 22 64 15649 28,87 3,791 Drawings 542 0 1 47 ,09 ,282 Installations 542 0 1 32 ,06 ,236 Paintings 542 0 1 136 ,25 ,434 Photography 542 0 1 97 ,18 ,384 Sculptures 542 0 1 99 ,18 ,387 VideoFilm 542 0 1 102 ,19 ,391 MiscArtDiscpl 542 0 1 29 ,05 ,225 Total_reviews 542 0 58 1952 3,60 7,609 Total_soloexh 542 0 16 775 1,43 2,288 Total_gallery 542 0 6 193 ,36 ,879 Total_awards 542 0 11 624 1,15 1,689 Award_YN 542 0 1 274 ,51 ,500 Award_1ormore 542 0 2 426 ,79 ,855 jury_market 127 0 1 1 ,01 ,089 Jury_peer 127 0 1 18 ,14 ,350 Jury_expert 127 0 1 53 ,42 ,495 Jury_hybrid 127 0 1 55 ,43 ,497 Valid N (listwise) 127 Descriptive Statistics
