Art Market Analytics
The most successful 200 individual living and deceased Aboriginal and Torres Strait Islander artists are ranked annually according to secondary market performance indicators. Their AAMI Rating is calculated according to a formula devised by Adrian Newstead OAM in consultation with John Furphy of the Australian Art Sales Digest and advice from the arts economist Dr. Jon Stanford.
How is the AAMI Calculated?
An individual artist’s AAMI Rating is calculated on both a yearly basis an accumulates throughout each year that their works appear for sale. It is based on the total value of all of their artworks sold at public auctions, their clearance (success) rate (the number of artworks sold divided by the number that were offered), and their average price.
Each of these factors is weighted according to the following formula:
AAMI Rating = Success Rate + Profligacy Index + Unit Value
Success Rate = Total Sales ($AUDmillions) x Clearance Rate
Profligacy Index = Number of Works Offered / 100
Unit Value = Average Price / 10,000
Anomalies
These arise when artists have too few sales records or they have so many sales over such a long period that their low average prices skew results. For example: Arnhem Land artist Pankalyirri’s one and only work ever offered achieved a result of $94,500, giving him a huge average price and a 100% clearance rate. At the other end of the spectrum several Hermannsburg painters have had up to 800 works offered yet their average prices are well below $500. In order to overcome these distortions and flatten out the results statistically the following adjustments have been made.
Overcoming Anomalies
In order to overcome these distortions and flatten out the results statistically the following adjustments have been made.To be automatically eligible for inclusion in the top 200 artists:
An artist’s average price must be greater than a threshold. The threshold increases each year, based on the health of the market. This value was around $1000 in 2008 and $1500 in 2015. the number of works offered must be equal to or exceed 20
The AAMI rating for artists with less than a minimum of 20 works offered is adjusted by a factor equal to the total number of works offered divided by 20. Similarly if the average price is lower than the threshold, it also is adjusted by a factor equal to the average price divided by the threshold, thus a gradual rise towards parity.
Due to the increase in the average price threshold each year an artist’s cumulative result may actually decrease. In these very rare cases, an artist’s AIAM rating may be negative during that year.
