How is the price of art evaluated? How much of that price is a reflection of the artist's skills vs reputation?

Answer 1

The cost of art is calcuated many ways, some of the most common being the cost of goods sold (materials used to make the art) plus profit margin (how much the artist or dealer is willing to make) which is a popular pricing method for newer artists.

For well-known names that have shining reputations, their signatures increase their work, meaning people are willing to pay for the brand. Think of your own valuation of products when you are in a grocery store. Sure, pizza sauce from the Wal-Mart brand is similiar to Rao's, but you can get better quality and you trust the reputation of the brand name.