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Location Patterns of Manhattan Art Galleries: Evidence of Agglomeration Economies

Jenny Schuetz, Elizabeth Currid-Halkett and Richard K. Green
The art market is famous for auctions at Sotheby’s and Christie’s, where works by well-known artists sell for stratospheric prices. Researchers often have concluded that auction prices are not driven by economic fundamentals; that they reflect some degree of unpredictable or irrational behavior by consumers. In this paper, we ask whether the broader retail art market, which is composed mostly of small galleries, is more consistent with standard economic models. In particular, we examine whether the location patterns of Manhattan art galleries exhibit agglomeration economies typical of retail markets. We also look at the correlation between gallery clusters and neighborhood economic and demographic characteristics, and whether location affects gallery longevity.