The art market as economic indicator

As the economy weakens, one might expect that a luxury segment such as fine art would drop as well. And perhaps it has, Robert Franks reports in The Art Market's Stealth Correction. We haven't seen headlines trumpeting a fall in prices, according to Franks, because the big auction houses are managing the supply, cutting the spring auction offerings by 25%. Prices at the highest end of the market haven't suffered, but they have in the middle. Says Franks:

Gauging art prices based on the record-shattering prices for an Andy Warhol is a bit like gauging the stock market based on the share price of Google.

UPDATE: Compare Show Me the Monet in Barron's.