Is the Art Market More Bourgeois Than Bohemian?

Media and academic attention to the art market has mostly focused on the high end, composed of famous auction houses and a few well-known international dealers. In this paper, we use a newly developed database to examine the industry structure and location patterns of the broader New York art market, which consists largely of small, independent and relatively unknown galleries. We find that Manhattan galleries are highly spatially concentrated, and that clustering reflects both agglomeration economies and preferences over location-specific amenities. As predicted by theories of agglomeration economies, new galleries are more likely to open in neighborhoods with existing gallery clusters, and proximity to other galleries increases firm and establishment lifespan. We also find evidence that new galleries locate in neighborhoods with high population density and more affluent households, consistent with location models of luxury retail. The results are not consistent with the hypothesis that galleries locate in cheap, "bohemian" neighborhoods, as proxied by several demographic and economic variables.