An artist once told me that he sets his prices based on how long the work of art took him to complete. Is this typical for how prices are determined for works of art?
That is not a typical method for artists in determining prices. Many artists find that it takes just as long if not longer to complete a small work of art as it would for a large work of art. Also, as an artist becomes more proficient in their technique, they will become more efficient and typically faster over the years. The actual pricing of art is typically determined by the size of the work and medium employed. Pricing is further established based on the artist's reputation and market factors.
Paintings are priced based on the size of the work. However, artists sometimes make the mistake of determining the price down to the square inch of the work. This is a slippery slope to be so formulaic. A large painting would be overpriced if the price per square inch is set too high and conversely a small painting would be underpriced if the price per square inch is too low. Instead, the price should be based on size in a more generalized method while weighing addition variables.
The type of medium the artist uses does affect pricing. For example, a watercolor on paper is typically priced lower than an oil on canvas even if they are the same size. This has come out of tradition in art pricing and reflects some misconceptions in the market. Nonetheless, it has become common for works on paper to be priced less than works on canvas.
The most important variable in establishing price is the artist's reputation, which covers all aspects of an artist’s professional career. This includes: having works in permanent collections of museums, receiving critical acclaim from art critics and art historians, being exhibited in solo and group shows at museums, being the subject of professionally authored and published books, having been an artist in residence at a university or museum, being invited as a guest lecturer at universities and museums, receiving grants from foundations, having works in corporate collections, receiving recognition in juried exhibitions, and holding gallery representation. Artists that have established their reputations by meeting one or more of the above can set a higher price for their work than an emerging artist who is just starting out.
Another factor is with market variables, which is related to the commercial success of an artist and sales. If an artist is popular commercially, they will likely command higher prices. This is not necessarily a sustainable method for long term values. Simply put, tastes and popularity can change. So, while this does play a role, we still look to the artists’ reputation as being the most reliable variable to maintain consistency in pricing over the years.