Terms that both refer to the assignment of monetary value to works of fine or decorative artworks; they are often used interchangeably but, in fact, are only partially related in meaning. “Appraisal” represents the field whose practitioners assign values to properties for specific—often official or legal—purposes (e.g., tax deductions for museum donations, equitable distribution of property in the event of a divorce or dissolution of a gallery co-ownership, etc.). The documents that convey these substantiated values are also referred to as “appraisals.”
“Valuation,” by contrast, is an activity that is carried out by any number of art world participants. For example, artists are often the first to value their creative output inasmuch as they must approve the prices they will accept for their artworks; they are pricing, but not appraising, their own work. Similarly, when dealers create price lists for an artist’s works, they are not appraising those works, they are pricing them. The real difference between the two is that appraisers’ values are opinions that are supported by analysis and data (often in the form of prices paid for similar works, referred to as “comparables”), whereas values assigned by other art world practitioners are simply price targets that may or may not ever be attained. In the auction world, prices actually paid are referred to as “prices realized.” In other words, appraisals are opinions, and prices realized are the facts upon which those opinions are based. This article will elaborate upon these concepts while tracing the development and current state of the appraisal profession, with particular reference to the USA and UK....