How Do We Value Art?

What I am writing about today is specific to as Why do we invest in ART? Why or How do we put a value on Art?

Walking through the AGO, I pondered, what is the lure of owning a piece of art? For basic functionality, that is easy. Everyone needs to decorate a space and I agree that art is an excellent tool to do so. But for investing purposes, how do we value something that is essentially priceless?

For example, Jackson Pollock's, No.5 1948. As of 2006, this is the most expensive piece of art ever sold @ $140M. It is easy enough to point to the Laws of Supply and

Demand, But Really?

Look at this image. Does it have any significance to anything/anyone except the artist? We could argue back and forth but ultimately the value is held in the hands of the artist. We are essentially put a price on someone's artistic interpretation.

Is there value in the piece itself? Or does value lie in when the artists intent is incomprehensible to the untrained observer?

When valuing Art or even understanding it, I am at a value of [0,0]. Looking at the piece above, someone like myself would initially only see splatters of paint across a piece of material. I would not be able to value that. However, if I understood what the artist was trying to get at then there is something tangible to value.

Like everything else in the world, we value what we can't have or what we don't understand.