6

2. Inflation-Adjusted Prices

The “nominal value” represents the prices originally achieved at auction. The “inf lation-adjusted value”

accounts for the ef fects of inf lation from the time of sale to December 2023, calculated using the US

CPI-U index (consumer price index). Inf lation adjustments provide a consistent basis for long-term

comparisons, enabling more accurate analysis.

Case study: taking the 2001 sale of Van Gogh’s Two Lovers as an example, $4M in 2001 is

equivalent to $7M in December 2023.

3. CAGR (Compound Annual Growth Rate)

CAGR measures the mean annual growth rate of an investment over a specif ied period of time,

assuming the investment grows at a steady rate. Here it is calculated using the dif ference in price

between two auction sales and the time elapsed between the sales. Nominal values and inf lation-

adjusted prices can produce signif icantly dif ferent results when calculating CAGR.

Case study: adjusting prices for inf lation results in signif icantly lower CAGRs revealing the true

extent of the artwork’s value increase.

Repeat Sale 2

Repeat Sale 1

CAGR

48

Auction Prices Case Study: Nominal Value vs. Inflation Adjusted

CAGR Case Study: Nominal vs. Inflation Adjusted

CAGR

72

CAGR

25

CAGR

48

Nominal Value InflationAdjusted Value

Nominal Value Adjusted for Inf lation

$4M

$7M$7.1M

$9.5M

$13.3M

$14.3M

2001

2013 2022