Money can be a dirty word when discussing the aesthetic merits of a work of art. Yet cash and commerce are crucial elements of a scene where many collectors display what one insider calls "mild obsession". Others, fewer in number, stay focused on the bottom line.

Either way, auction results, anecdotal evidence and galleries which appear to be thriving suggest that the art market is booming. Once seen as the preserve of high-rolling aficionados, the trade today is less elitist and growing rapidly.

"Business has improved tremendously in recent years," said Ms Suzanne Macdougald, owner of the Soloman Gallery and chairwoman of the Contemporary Art Gallery Association. "We're dealing with a much more educated and informed public."

It is easy, however, for aspiring collectors to be put off by big prices fetched in high-profile auction houses.

For example, only a very small minority could afford the £1.15 million sterling (€1.92 million) paid last May for a work by Louis Le Brocquy at a London auction - a record for a living Irish artist. And days earlier, businessman Dr Tony O'Reilly paid more than $24 million (€27 million ) for a work by the French impressionist Monet at a New York auction.

But at the low end of the scale, limited edition prints of work by other artists can be bought for £300 or less. Given that about 500,000 small investors put significant sums last year into Eircom - whose shares remain below their flotation rate - this does not seem prohibitive.

According to Mr Niall Monaghan, an architect who advised Bank of Ireland on its substantial collection, the entry level value for works of "substance" is about £1,000. And, if chosen well, there is fair chance that a work will rise in value.

Nevertheless, one eminent financial adviser, who does business with several clients who own large collections, said people should not buy for pure investment purposes. Far better, he said, to have an intrinsic interest in the work itself.

"The only reason to buy something is because you like it. Having said that, you want to make sure your money is safe," said Ms Macdougald.

According to Ms Josephine Kelliher, a director of the Rubicon Gallery in central Dublin, the question of a work's long-term value and the possibility of appreciation is a critical issue. "At the back of everybody's mind is the question of investment. Almost every art buyer asks the question of whether or not they're getting a good investment," she said.

This may be unique to art. As Ms Kelliher pointed out, people purchasing expensive items of furniture or elaborate hi-fi systems do not ask the same questions.

She added that art is on "the edge" of the luxury goods market and may be subject to economic dips. The director of Irish art at Christies auction house in London, Mr Bernard Williams, pointed out that while Irish art yielded £2 million sterling annually between 1988 and 1990, sales fell to £150,000 following a recessionary slump in 1991.

According to experts, the key for the art collector is to develop a specialist knowledge of the field. Some observers say the process is similar to cultivating an indepth knowledge of shares on the stock exchange. Of course, this takes time to develop, much like the reputation of a particular artist.

"To spot a winner you've got to have an educated eye," said Mr Monaghan. While a person with a significant sum to invest might pay for the advice of an expert, others will depend on relationship of trust with a gallery and knowledge derived from a viewing habit or reading.

"The other thing is that you've got to hold on to the thing for a fair while and, if you're going to put it on the wall, you've got to like it," Mr Monaghan added.

At the highest levels, valuation will depend on four factors, according to Ms Stella Coffey, executive director of the Artists' Association of Ireland. These are:

Peer recognition of the artist.

Critical recognition.

Patronage of dealers and collectors.

Public acclaim.

Such influences are clearly at work where major works fetch exceptional prices. At Christies most recent sale of Irish work last May, an unnamed Irish buyer paid £454,750 for a painting by Thomas Roberts and a US collector spent £289,750 on a piece by Roderic O'Conor.

Mr Williams attributed these valuations to a "passion" displayed for Irish art by collectors and the relative rarity of work by leading Irish painters now commanding very high prices.

Besides Yeats and O'Conor, this select group also includes William Orpen, Walter Osborne and Sir John Lavery.

Reports last year suggested that works by 26 Irish artists achieved record prices at auctions. A growing trend is for works by living Irish artists to go to auction because of strong demand, said Ms Kelliher, who specialises in works by emerging Irish artists. Ms Macdougald advised that the safest investment is in works-by the "major seniors" on the scene such as Tony O'Malley, Basil Blackshaw, John Shinners, Peter Collis and Richard Kingston. Works by these artists may cost thousands but less than tensof-thousands, she said.

Younger artists' works may cost less, though its value may diminish if the artist abandons their career. "Not everybody continues in the business, unfortunately," added Ms Macdougald.

Ms Coffey said: "One of the things supposed to contribute to the risk is that the art world has made up its mind about a particular artist." Values, of course, will increase if the market decides that a certain painter is "in", although it could take up to 20 years for an artist to establish a reputation.

Irish buyers have traditionally preferred figurative to abstract work, though observers said this may be changing.

The value of work by established artists who die will increase automatically. Experts said work by the late Derek Hill, who died last month, may well have increased immediately by 20-30 per cent.

Another factor is that individual buyers may face competition from large institutions. Allied Irish Banks and Bank of Ireland are well-known investors, although other bodies such as Microsoft, Dublin City University and the University of Limerick, the larger accounting and law firms, and several prominent hotels have also acquired art.

According to Ms Brigid Roden, chief executive of Cothu, a body which promotes arts sponsorship, Irish businesses spent £10.2 million on the arts in 1997, the last year for which figures are available. Of this, some £1.4 million was spent on visual arts and galleries.

People contemplating spending significant sums on art should also consider security and insurance.