The Economics of Coffee Shop Art

Credit to “.nate” and the twitter emoji project

If you have entered into a non-chain coffee shop in the last decade you have likely encountered an interesting phenomenon: ridiculously over-priced art from unknown artists. These pieces of art from postmodernist takes on the human form, to classical paintings of a bowl of fruit. However, they all share the common characteristics of costing enough to give any reasonable person sticker shock, and being the creation of an artist no one has ever heard of. Now you might suggest that the price of art is simply a way to signal value, and it is also a way to recoup the investment in paint, canvas, etc. Both of these assertions are incorrect.

Firstly, signalling value through price makes sense as we know these types of goods exist as ‘luxury goods’ a.k.a Veblen goods, meaning that they increase in demand with increases in price. However, this signalling only works given that there is any reason to assume that the art has special value in the first place. Unlike something such as ‘French’ wine, there is no reason to assume that art from Jimmy ‘nobody cares’ from ‘nowheresville’.

Secondly, if you price your art to pay for your fixed cost and your paintings aren’t selling, then you have a problem. Your problem is that you priced above the market price for the demand for coffee house art, and even more importantly you shouldn’t have made the art in the first place because your fixed cost > potential profit!

This is all not to say that there isn’t any market for coffee house art. I’m sure there is some people who want to buy the art, and even some who buy pieces after growing fond of seeing them on the wall of their local coffee shop. The bottom line is coffee shop art makes these establishments look nicer, and if you are doing it as more of hobby without expectations of payment then go ahead. To everyone else: stop making bad coffee shop art, and instead make something people actually like. Maybe try your luck at making a bad coffee table.


About Brennan

Brennan is a fourth year economics major at the University of Puget Sound.

One Reply to “The Economics of Coffee Shop Art”

  1. Interesting. I would love to see the literature on how art pricing works. I know from artist friends that they typically face feast-or-famine lives: mostly not selling work and occasionally experiencing a big windfall when a piece sells. So why aren’t they pricing their work more reasonably and, in principle, earning a more consistent living.

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