May 31, 2016

By Frederick Chen and Rebecca Regan

Art theft.png

More than 50,000 pieces of artwork are stolen each year globally, and many cases of art crimes are facilitated by lax security at museums. How can economic theory account for these observations, and what kind of policies would help reduce the incidence of art thefts?

In the morning of 18 March 1990, thieves disguised as Boston police officers broke into the Isabella Stewart Gardner Museum and stole over a dozen masterpieces valued at more than $500 million altogether. Twenty-six years later, the artworks are still missing.

News articles about art thefts seem to appear just about every week. This should not be surprising: it has been estimated that more than 50,000 pieces of artwork are stolen each year around the world, and the black market for stolen art is valued at between $6 billion and $8 billion annually.

While art thieves in many movies are depicted as debonair, smooth, and highly intelligent criminal masterminds who are able to defeat sophisticated, multi-million dollar security systems installed in museums, galleries, or art connoisseurs’ private residences, reality is much more prosaic. Museum security tends to be poor, and many art thefts are crimes of opportunity.

When artworks are stolen, the victims are often hesitant to notify the police. Even if law enforcement agencies are alerted, they may not have the staff for or the interest in investigating art crimes, which are not easy to solve—only about 10% of stolen artworks are recovered.

Art has elements of a public good, which means that one person’s enjoyment of it does not diminish the amount available for others to enjoy. Therefore, art heists—and measures adopted by museums to prevent them, as well as resources that the police or art owners invest in the recovery of stolen art—have welfare consequences not only for museums, galleries, and art thieves, but also for the general public. Because stolen artworks may end up getting damaged, destroyed, or stored away by art criminals who are unable or unwilling to sell them in the black market—hence becoming unavailable for the public to enjoy—art thefts may impose significant costs on society.

To better understand the economics of art crimes, specifically, the incentives of museums and galleries to invest in security measures, we presented and analyzed an economic model of art heists in Arts and Craftiness: An Economic Analysis of Art Heists. Because museums in general need to consider how thieves will act when making their decisions about security, and because art thieves’ cost-benefit calculation of attempting a heist depends on museums’ level of security, our analysis utilizes a game-theoretic approach that explicitly accounts for the interdependence between museums’ and art thieves’ decisions.

Our model incorporates several key features of the black market for stolen art. These include: stolen art is harder to sell the more famous or valuable it is; stolen art sells for only a small fraction of their open market value—about ten percent—in the black market; and art owners may engage in private negotiations with thieves after a successful heist for the return of stolen artwork. We used our model to study the implications of these features of the stolen art market for museums’ investment decisions regarding security and to analyze how museums and art thieves may react to various policy changes in the art market. The policies we examined are: subsidizing museums for investing in protection; increasing the penalty for committing art theft; investing more in law enforcement agencies to raise their effectiveness in solving art crimes; and cracking down harder on black market exchanges.

Our model shows that when the effectiveness of law enforcement agencies to investigate art thefts is low, museums would prefer to rely on private negotiations with thieves to recover stolen art. Moreover, the level of security museums choose need not rise with the open or black market value of artwork. An implication of this result is that artworks with extremely high open market value may be given a low level of protection, although that does not necessarily mean that they will be high on thieves’ target list.

The effects of a shift in public policy depend critically on what type of policy change is considered. A subsidy to museums for security measures causes museums to increase their level of protection and decreases the amount of theft. An increase in the penalty imposed for committing art theft also reduces art crimes and, just like a subsidy, can lead museums to spend more on security.

On the other hand, investing more resources in law enforcement agencies so that they are better able to solve art crimes can actually increase the amount of theft by causing museums to spend less on security. Policies that make it harder or costlier to conduct transactions involving stolen art—thereby reducing their black market value—can also cause more art thefts by decreasing museums’ incentive to invest in security. When law enforcement agencies are ineffective in investigating art crimes so that museums prefer private negotiations for recovering stolen art, the cost of getting back the artworks is dependent on their black market value. Therefore, any policy changes that reduce these black market values make it cheaper for the museums to engage in private negotiations and lower the benefit of investing in security.

Although our model is highly stylized, it illustrates how different types of policy interventions can have dramatically different—sometimes, counter-intuitive—effects. To reduce the amount of art theft, it is paramount to understand clearly the potential consequences of any policy changes in the art market. As noted in our paper, there is still much to learn about the economics of art heists.


This article is based on:

Chen, Frederick and Rebecca Regan (2016) ‘Arts and craftiness: an economic analysis of art heists‘ in Journal of Cultural Economics. DOI: 10.1007/s10824-016-9269-6.

Author information:

Frederick Chen is an associate professor of economics at Wake Forest University in North Carolina, USA.

Rebecca Regan is a research associate at the Federal Reserve Bank of San Francisco in California, USA.


Art Heist (2016) by Maggie Pyle.CC BY-ND 4.0.

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