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Art Investment: An Empirical Inquiry
... According to a strand of the literature ( Chanel, 1995 ;Goetzmann, 1990 ), the art market is correlated to the economic conditions as also illustrated by a sharp decline in 2009, a few months after the outbreak of the banking crisis. However, other studies ( Baumol, 1986 ;Frey & Pommerehne, 1989a ;1989b ) argue that it is impossible to predict the prices of works of art, as they are efficient, and as such, no one is able to 'beat the market'. The assumption of unpredictability is reinforced by the rather widespread feeling of buyers' irrationality. ...
... The auctioneers achieve prices that meet their pre-sale estimates, as evidenced by the average unsold rate, around 30% depending on the time period ( Ashenfelter & Graddy, 2011 ). Finally, the historical studies of Baumol (1986) and Frey & Pommerehne, 1989a, 1989b are based on a small number of sales results, 640 and 1198 paintings, respectively, which are obtained over a long period of three centuries (from the 17th to the 20th century) and mixing a lot of artistic schools. Hence, results include a lot of averaging out of things that may not belong together. ...
... The authors argue that tastes change slowly, although unpredictably in some cases, and they develop price indexes for paintings over the last 200 years. Since the first studies of Baumol (1986) and Frey and Pommerehne (1989a) where artwork characteristics were often minimal and limited to the artist's name, work's title and size, newer studies integrated more and more characteristics. For example, Candela et al., and Pattitoni (2012) separated signs (e.g., physical dimensions) to signals (e.g., qualitative information coming from events, such as exhibitions, bibliographies, 'historicization'), while, amongst a wide range of dimensions, Renneboog and Spaenjers (2013) detailed the authenticity aspects (i.e., expert descriptions, signature). ...
From its origin at the Renaissance, the art market is part of the global economy. Arts and cultural production add significant real values on the Gross Domestic Product (GDP) of several countries and a strong symbolic contribution in prestige for owners, either private collectors or cities and countries. The significant price fluctuations that may be observed in the market of artistic goods can be explained not only by the uniqueness of works of art and the economic conditions, but also by the changing preferences of buyers. The main aim of this paper is to develop an ordinal regression analysis model for studying the preferences of artistic goods buyers. The applied approach assumes that the price of a work of art depends on a set of criteria aiming to infer additive value functions that aggregate these criteria in such a way that these functions are optimally consistent with a given price. The presented study uses a large set of auction data from the Art Deco furniture market and considers several different criteria that may influence buyers’ preferences. These criteria are related to the physical or intangible characteristics of artistic goods. The results are mainly focused on analyzing buyer's preferences (e.g., contribution of several factors to the price of artistic goods), while the ordinal regression model has been applied in different time periods in order to study how preferences evolve over time. Finally, stability analysis has been performed, with the aim of evaluating the robustness of the results.
... Early studies employed simple estimation methods without controlling for variables that represent artwork quality (Baumol, 1986;Frey & Pommerehne, 1989;Stein, 1977). Stein (1977) constructed an index based on average annual transaction prices, treating auctioned works as a random sample of deceased artists' works. ...
... Stein (1977) constructed an index based on average annual transaction prices, treating auctioned works as a random sample of deceased artists' works. Baumol (1986) and Frey and Pommerehne (1989) calculated geometric mean returns for works sold at least twice during the study period. Recent studies, however, have adopted hedonic regression or repeat-sales regression to estimate price variations in artworks. ...
This study investigates how the bought-in is related to the future returns of artworks in the Korean auction market. Employing a repeat-sales model and a dataset from Seoul Auction and K-Auction (1998–2024), the analysis indicates that artworks previously experienced bought-in tend to yield total returns approximately 14.4% lower than those without such an experience. This result suggests that the bought-in may function as a negative signal of value, possibly due to the slow diffusion of information in the art market. Furthermore, the study finds that declining prices can establish new valuation benchmarks, which, in turn, appear to shape market participants’ perceptions. These findings contribute to the literature on market efficiency and behavioral economics by providing evidence of anchoring and loss aversion in auction settings. The study also reconsiders the economic role of the reserve price, highlighting its protective function in stabilizing values within a volatile and information-sensitive market. In practical terms, the insights offered here underscore the importance of data-driven strategies for setting reserve prices and designing auctions to enhance transparency, mitigate inefficiencies, and foster long-term market sustainability.
... There are now many excellent survey articles, textbooks, and collections of articles (e.g. Frey and Pommerehne 1990b;Blaug 2001;Throsby 1994Throsby , 2010Towse 2011Towse , 2014Towse , 2019Ginsburgh and Throsby 2006;Frey 2003Frey , 2019Bille et al. 2020). The Association for Cultural Economics International has institutionalised the study of the field, regularly organises conferences, and publishes a review entitled the Journal of Cultural Economics. ...
... There are now many excellent survey articles, textbooks, and collections of articles (e.g. Frey and Pommerehne 1990b;Blaug 2001;Throsby 1994Throsby , 2010Towse 2011Towse , 2014Towse , 2019Ginsburgh and Throsby 2006;Frey 2003Frey , 2019Bille et al. 2020). The Association for Cultural Economics International has institutionalised the study of the field, regularly organises conferences, and publishes a review entitled the Journal of Cultural Economics. ...
Modern economics includes two fundamentally different fields, but identically labelled ‘Cultural Economics’. The first type deals with cultural institutions in a specific sector of the economy and society: the performing arts, visual arts, and other forms of cultural industry. The second type analyses how culture influences the economy in the form of shared beliefs, norms, and preferences. The two types of Cultural Economics largely disregard each other. This paper argues that their mutual existence should be acknowledged and possible relationships between the fields should be analysed. Future interconnected research opportunities are suggested.
... Governments may expropriate an artwork by claiming that it is a part of the "national heritage." When there is an increase in the sales or the property taxes, the investors in the art market might move to the classic financial investments (Frey and Cueni, 2013;Frey and Pommerehne, 1989). The changes in genres and tastes also impose a risk on the future value of the artwork. ...
... Appendix Seçkin (2012) 3.67 (12.74) -1968-2008 Canada Mei and Moses (2002) 4.9 (42.8) 6.6 (8.7) 1875-1999 The U.S. Agnello (2002) 4.2 (23.1) 11.6 (12.1) 1971-1996 The U.S. Worthington and Higgs (2004) 3.03 ( Frey and Eichenberger (1995) and Frey and Pommerehne (1989) provide the detailed presentation of the returns on the art and paintings investments before the 1990s. ...
This paper constructs the most comprehensive paintings price index in Turkey by using 32,391 manually collected sales transactions, including artworks of 413 artists over the period 1990–2016. The results indicate that the Turkish paintings market underperforms the domestic stock market, but leading to the higher returns compared to the global paintings and the global stock markets. The results from the causality analysis also demonstrate that there is the feedback effect between the domestic paintings and the domestic stock market. Furthermore, the findings cannot reject the null hypothesis that there is no bubble in the Turkish Paintings price index. Finally, the geopolitical and the political risks in Turkey are among the main reasons for the diminishing returns of the Turkish paintings market after 2010.
... Generally, the willingness to pay is based on the buyer's taste or preferences, income, and the prices of substitute or complementary goods. Specifically for artworks, Frey and Pommerehne (1989) say that demand is explained by price, aesthetic quality, consumer income and not least financial market characteristics. The latter factor counts if the customer calculates rationally in accordance with Equation (2) and regards the good as an investment that could later be marketed again. ...
... From a pure economics perspective, the supply of artworks, like any other goods, should be determined by market prices and production costs (Frey and Pommerehne 1989). Cost elements include capital, labour and skills development for design, production and sales. ...
This article offers a theoretical discussion on how major neoclassical economic theory assumptions blur the understanding of creative industries. By distinguishing between creative-rational and creative-intuitive industries, with different compositions of commercial and cultural attributes, we particularly show how the latter sector has characteristics and dynamics that are incompatible with a theory based on preference rationality, profit maximisation and equal access to information among actors. When customer utility is composed of economic, as well as aesthetic, spiritual, social, historical, symbolic and authenticity values, then all these will affect customers' willingness to pay, and a single monetary standard based on preference rationality is difficult to establish. In addition, when artistic integrity is a central aspect of creative production, prices will have a limited impact on supply. We identify three types of market failure in creative industries due to information asymmetries, namely ‘lemon markets’, ‘concentration markets’ and ‘speculator markets’. We propose further research on subjective reasoning among buyers and how prices are set; how artistic and economic logics of producers relate to business performance; and how creative industries' growth can be facilitated, not least in poor economies with a high need for employment creation.
... 5 6 Para ello cita al sociólogo y matemático Thorsten Veblen, el cual en su Teoría de la clase ociosa (The theory of the Leisure Class) enunciada en 1899 en la que postuló que en las evaluaciones que una persona hace de la belleza de un objeto influye siempre su coste (VEBLEN, 1899). 6 7 Es evidente la disparidad de opiniones al respecto localizada en la bibliografía, así encontramos autores que la fijan el peso principal en el valor de la pieza, con sorprendente precisión, en un único atributo que concentra el 59% (FREY Y POMMEREHNE, 1989), mientras, otros consideran que debe ser menor al no tratarse de una opinión objetiva (THROSBY, 1994(THROSBY, y 2003. -281 -objetivos de tipo analítico, es decir, aquéllos basados en estudios matemáticos de los distintos factores que influyen en el valor de las piezas, son los que nos llevarán a resultados objetivos cuyas estimaciones han resultados estar muy aproximadas a los precios de mercado con un margen de error realmente bajo (VICO, 2010). ...
Se presentan 21 monedas romanas inéditas recuperadas en el transcurso de varias prospecciones realizadas en Arjonilla (Jaén). En este artículo, se puede ver su vinculación a la circulación monetaria romana en el Alto Guadalquivir.
... Auction sales are unique channels that provide public information about market prices, contrary to galleries or private sales, which are more difficult to collect, mostly due to confidentiality reasons. Auction prices notably influence the art market, as gallerists, merchants, and collectors consider them as guiding prices (Frey & Pommerehne, 1989). ...
This study investigates how vertical (quality-related) and horizontal (taste-related) differentiation influences the probability of sale and market price of auctioned artworks. We explore a new art market, namely, original comic works. By including unsold lots, we correct the selection bias commonly found in the literature. We propose an original set of variables accounting for vertical differentiation in this market (i.e., commercial and critical successes, the artist's reputation, role, and recognition). Vertically differentiated artworks do not sell better, but warrant a premium. Regarding horizontal differentiation, newly explored variables have a significant effect on sales and (often) auction prices.
... The relationship between the price of a painting and its attributes-size, aspect ratio, support, age of the artist at time of creation, characteristics of the sale-has been explored extensively since the 70s. [9][10][11][12][13] Consistently, the size (area) of a painting has been found to be one of the major drivers of price (after controlling for the year of the sale). ...
We propose a general framework to study the relationship between the price of a painting and its color‐related attributes. To this end we focus on four key aspects: dominant colors, features of the color palette, color harmony, and color emotions. We demonstrate the usefulness of this approach with an example based on Mark Rothko's post‐1950 paintings (the “rectangular” series), and auction data from the 1994 to 2018 period. We identify two distinct price‐color regimes in Rothko's market: (a) [1994‐2005], a period in which prices are explained mainly by the growing popularity of the artist regardless of the color attributes of the paintings sold; and (b) [2006‐2018], a period in which color‐related attributes explain most of the prices. Furthermore, we find that in this second period, the dominant colors and the diversity of the color palette, are by far the most relevant attributes that influence the price; color harmony and color emotions hold almost no explanatory power during this period. Finally, we propose a new metric based on the Herfindahl Index to describe color diversity; this metric seems to be promising at characterizing the effect of the color palette on the price of a painting.
... These changes reflect a changing art world, with issues 13 Is the rate over and above the pace of inflation captured by the consumer price index. 14 See Richard Rush (1961), Frey and Pommerehne (1989), Mei and Moses (2002) and Campbell (2008a) and Kortewijk (2015) for examples of the art investment literature over the decades. 34 The arts and finance such as values, trust, liquidity, all playing an inherently important role in characterising the arts, culture and society. ...
... For example, antique firearms(Avery and Colonna, 1987), beanie babies(Burton and Jacobsen, 1999), ceramics(Keen, 1971;Stein, 1977;Deutschman and Ballen, 1991), coins(Kane, 1984;Koford and Tschoegl, 1998; Dickie et al., 2008), diamonds(Dohrman, 1981; Renneboog and Spaenjers, 2012), mettlach beer steins(Kelly, 1994), photographs(Pompe, 1996;Perloff, 1998;Burton and Jacobsen, 1999), stamps(Renneboog and Spaenjers, 2009), timber(Redmond and Cubbage, 1988) and violins(Ross and Zondervan, 1989).3 Anderson (1974),Baumol (1986),Frey and Pommerehne (1989),Goetzmann (1993),Pesando (1993), Pesando and Shum (1999),Renneboog and Van Houtte (2002),Mei and Moses (2002) andCampbell (2006).4 Krasker (1979),Jaeger (1981),Fogarty (2006Fogarty ( , 2010,Sanning et al. (2008),Masset and Henderson (2010),Kourtis et al. (2012),Bouri (2014),Dimson et al. (2015), Devine and Lucey(2015),Masset and Weisskopf (2015),Aytac and Mandou (2016),Bouri and Roubaud (2016) andLe Fur et al. (2016). ...
We analyze the long-term relationship between the classic cars market and stock markets, from the world level to specific countries, by applying a cointegration approach on a 23-year monthly database. The database includes the K500 Index, nine classic cars sub-indexes and 56 MSCI indexes. The results show a significant cointegration between classic cars markets and the Asia, Asia-Pacific, Far East and Pacific region markets. Porsche is influenced by the Asian, European and Far East regions, while Ferrari is mainly influenced by developed markets. During the period preceding the crisis, only the Asia, Far East and Pacific zones influenced the price of classic cars. This influence then extends to Europe in the post-crisis period with a much larger number of cointegrations. The strong creation of wealth in terms of the number of High Net Worth Individuals and Ultra High Net Worth Individuals in Asia could support this trend. We suggest that our approach can be taken into consideration in classic cars price forecasting and portfolio diversification strategy.
... Moreover, risk appears to be high compared with traditional assets, making an investment even less attractive in terms of risk-return characteristics. Over time, these features have been confirmed by multiple authors, such as Frey and Pommerehne (1989), Pesando (1993), Agnello and Pierce (1996), Flores et al. (1999), Agnello (2002), and Pesando and Shum (2008). In a more recent study, Renneboog and Spaenjers (2013) showed a real return of around 4% since 1957 for art. ...
This article examines prior evidence and proposes an empirical study of the performance of passion investments in comparison with financial and real assets over the past 20 years. Over this period, classic cars and fine wines (but not visual art) display better returns than U.S. equity, fixed income, and real estate. Volatilities are, overall, low but increase once returns are adjusted for the inherent illiquidity on collectible markets. In a CAPM framework, only classic cars yield significant risk-adjusted returns with an annualized alpha of 5%. At the same time, correlations and systematic risk are low for all collectibles. This diversification benefit is confirmed by a 7% portfolio risk reduction following the inclusion of collectibles in a traditional financial portfolio. The authors further document that the inherent segmentation of collectible classes extends the benefits of cross-asset to intra-asset class diversification. Finally, they find that collectibles have performed slightly less well since the Global Financial Crisis.
... The relationship between the price of a painting and its attributes -size, aspect ratio, support, age of the artist at time of creation, characteristics of the sale-has been explored extensively since the 70s (e.g., Anderson 1974;Frey and Pommerehne 1989;Goetzmann 1993;Ginsburgh, Mei, and Moses 2006;Renneboog and Spaenjers 2013). Consistently, the size (area) of a painting has been found to be one of the major drivers of price (after controlling for the year of the sale). ...
The relationship between prices of paintings at public auctions and their attributes has received much attention in recent years. However, the effects of color have been mostly absent from these studies. The present study explored the relationship between price and color in Rothko’s post 1950 paintings, which were dominated by color rather than figurative elements. We characterized the color features of the paintings in terms of their dominant hues and luminosity. In addition, we developed two additional metrics to evaluate color contrast, and palette diversity. We found that in general the market favored diverse color compositions, and preferred reds over greens, blues over yellows, and lighter-colored paintings. We also identified two distinct price regimes in the period studied: a first period, dominated by enthusiasm for the artist, regardless of the painting’s characteristics; and a second period, driven by color-related attributes.
... The contingent valuation method (CVM) is the most commonly used method for determining WTP, despite criticism (mostly related to the hypothetical nature of the created market and the difficulty of placing a value on hard-to-define goods (Diamond & Hausman, 1994;Epstein, 2003). Throsby and Withers (1979) and Frey and Pommerehne (1989), among others, discuss various arguments for public support of cultural activities. There is broad agreement that the main reason for such support is positive consumer externalities and that CVM is the most effective way to quantify these externalities (Noonan, 2004;Snowball, 2005). ...
This study determines festival attendees’ Willingness To Pay to support an increase, or prevent a decline, in arts performances and exhibitions. It uses the contingent valuation method to produce a profile of attendees, showing how much, if anything, they are willing to pay per month over and above their current taxes, and their reasons for being willing or unwilling to pay extra. Apart from Snowball (2005), no studies to date have examined Willingness To Pay to support the arts in a developing country like South Africa. This study of the Aardklop festival shows how Willingness To Pay for the arts appears to have changed in South Africa over the past decade and it appears that arts patrons are less willing to pay than a decade ago. It suggests strategies for sustaining the arts in South Africa and will help events managers to identify the attendees who are willing to pay more.
... Son yıllarda uluslararası literatürde yatırım aracı olarak sanat ve yatırımın geri dönüş oranlarına yönelik olarak oldukça geniş kapsamda çalışmalar yer almakta, sanat eserlerinde ile hisse senedi, bono gibi geleneksel yatırım araçlarının riskgetiri oranlarına yönelik, farklı sanat dönemleri ve yıllar temelinde kıyaslamalar yapılmaktadır (Boumol, 1986;Frey ve Pommerehne, 1989;Frey ve Einchenberger, 1995;Worthington ve Higgs, 2003). Bu çalışmalar bağlamında genel olarak sanat yatırımının getiri oranının geleneksel finansal varlıklara yapılan yatırımdan daha düşük olduğu belirtilmektedir çünkü bir tabloya sahip olmanın ve onu izlemenin getirdiği psikolojik getiriler söz konusudur (Worthington ve Higgs, 2003;Frey ve Einchenberger, 1995 Tahvil ve hisse senetleri gibi geleneksel yatırım araçları ile düsük korelasyona sahip gerçek varlıklar için güçlü bir yatırımcı isteği uyandıran mevcut ekonomik belirsizlik, müsţeri talebini arttıran en önemli faktörlerden biri olarak öngörülmektedir (Deloitte, 2016). ...
Topluma ve bireylere ait olan değerler ile bu değerlerin sonraki kuşaklara akta-rımı olarak ifade edilebilen kültür ve söz konusu değerler temelinde toplumu besleyen bir unsur olarak sanat, ülkelerin ve bireylerin yaşam biçimlerini zen-ginleştiren yegane unsurlardan biridir. Gündelik hayatın bir öğesi olarak da ifade etmenin mümkün olduğu kültür ve sanat, söz konusu birlikteliğin ve gelişen sosyo-ekonomik yapının da bir getirisi olarak, kültür ve sanat eserlerinin üretim ve tüketimi kavramlarının irdelendiği, bu alanda artan bir talepten bahsetmenin mümkün olduğu, büyüyen ve gelişmekte olan bir ekonomik yapı ve çeşitlenen bir endüstri haline gelmiştir. Sanatın ve sanat eserlerinin, sanatseverler üzerindeki duygusal tatmin etkisinin yanı sıra, alternatif bir yatırım aracı olarak da yatırımcılar tarafından değerlen-dirilebilir bir olgu haline geldiği görülmektedir. Finansal piyasalardaki dalgalan-malar, yatırımcıların portföylerini çeşitlendirmeye yönelik tercihleri, estetik bir değer ve sosyal statü unsuru olarak görülmesi gibi sebepler nedeniyle, sanat eserleri kişilerin yatırım kararları aşamasında göz önünde bulundurdukları bir değer olarak karşımıza çıkmaktadır. Yaklaşık 10 yıllık bir geçmişten söz etmenin mümkün olduğu Türk sanat piyasası ise, büyüyen ve gelişmekte olan bir piyasa niteliğindedir. Bu çalışmanın amacı, bir yatırım aracı olarak sanat kavramını irdeleyerek, Türk sanat piyasasında, 2004 yılında Osman Hamdi Bey'in "Kaplumbağa Terbiyecisi" isimli tablosunun satışıyla başlayan kırılmanın günümüze dek gelişimini irdele-mek, özellikle son yıllardaki politik ve finansal dalgalanmaların Türk sanat piya-sası üzerindeki etkilerini ve bu dalgalanmaların yatırım davranışları açısından yansımasını gözler önüne sermektir.
Anahtar Kelimeler: Sanat Piyasası, Sanat yatırımı, Türk Sanat Piyasası
... Secondly, studies on the art market have fostered a debate on potenti al returns. While people may be overwhelmed by an amount of money spent during Christi e's or Sotheby's aucti ons, some researches argue that investi ng in art yields generally low returns (Baumol, 1986;Frey & Pommerehne, 1989). More recent fi ndings say that returns from art were close to the total return measured by S&P500 between 2003 and 2013. ...
Due to the constantly growing interest in alternative investments, the art market has become the subject of numerous studies. By publishing sales data, many services and auction houses provide a foundation for further research on the latest trends. Determining the definition of the artistic value or formalisation of appraisal may be considered quite complex. Statistical analysis, econometric methods or data mining techniques could pave the way towards better understanding of the mechanisms occurring on the art market. The goal of this paper is to identify, describe and compare solutions (and related challenges) that help to analyse, make decisions and define state of the art in the context of the intersection of econometrics on art markets and computer science. This work is also a starting point for further research.
... Also, aspects such as possession ("I want to have the work") (Belk 1991(Belk , 1995Case 2009;Dittmar 1992) were taken into account. Also considered were appreciation of the work's value, linked to its sale price, and its appreciation and recognition in the market (Buelens and Ginsburgh 1993;Frey and Pommerehne 1989;Hutter and Throsby 2008). Considered as well were social and symbolic aspects, such as reflecting the owner's status, fashion and taste, the possibility of showing the work to one's friends, and the work's legacy for future generations (Bourdieu 1984;Karababa and Kjeldgaard 2013;Rodner and Kerrigan 2014;Velthuis 2003). ...
In cinema-crazy India there are few spaces dedicated exclusively to live theatre. Theatre in the Western sense, with a permanent stage and regular performances based on literary texts, is seen as a leftover from the colonial period, an imported institution, whereas the original Indian performing arts tradition is closely linked to folk and religious events and festivals. The Ranga Shankara theatre in Bangalore has been remarkably successful in this difficult cultural and market environment. The author discusses Ranga Shankara’s management and marketing strategies. The experiences of multinational corporations in the Indian market and their reflection in the business literature provide a conceptual and comparative framework for understanding how a “foreign” cultural institution such as theatre can find an Indian audience.
... Further, an index based on the hedonics of the artwork (i.e. the aforementioned attributes of the sale) is created in order to deflate sales prices with 1850 as the base year. 11 In creating the hedonic index, we follow the methodology of Anderson (1974); Chanel (1995); Frey and Pommerehne (1989) where the price is regressed on the set of the idiosyncratic characteristics of the artwork in addition to time (year) dummies. 12 An overview of the employed artwork characteristics can be found in Table A2 of the appendix. ...
... Academic debates during this time highlight the active development of knowledge about the properties of art as an investment. There were claims that art investments could realize major profits, but such claims were contested by detractors, who pointed out that art historically yielded low returns on average (Baumol, 1986;Frey & Pommerehne, 1989), while risks were "extraordinary" (Goetzmann, 1993) and transaction costs high. Following along the idea of portfolio diversification, which had become more important since the 1970s, others argued that art could become an alternative investment or a hedge. ...
What can studying the creation of knowledge tell us about how new technical fields emerge and develop? This paper shows how a knowledge community may be necessary to support the legitimacy of new products that undergo performance evaluation before purchase. Using historical and ethnographic data covering half a century, we review the growth of the art investment field through an epistemic cultures lens. Technical knowledge about the financial characteristics of art has been developed alongside practical knowledge about how best to structure investment ventures. Investment venture success has been determined by legitimacy as much as by profitability, given durable expectations about the evaluation and monitoring of investments. The growth of knowledge, practices and tools was thus a necessary condition for the recognition of artwork as an asset class. Crucially, the epistemic cultures approach highlights deepening knowledge, resources and professional expertise, and their development through experimentation, failures and negative knowledge. This shows accounting issues contributing to technical field legitimacy and emergence, such as the role of knowledge production, valuation practices and receptive environments, and the distinction between legitimate investments that can be valued and investment venture profitability.
... The art market is heterogeneous in nature as no secondary market exists for it due to which resale of art is not frequent. Frey and Pommerehne (1989) noticed that buying art has become more popular since the end of World War II. Over the period 1635 1987 they concluded that the monetary rate of return of art is lower compared to that of financial assets". ...
This paper will examine the return and probability for mixed portfolio among major art works and financial markets. We have carried the search for higher returns via alternative asset avenues due to the comparatively poor performance of traditional assets. The determination to earn maximum returns from transformation into various assets, that offer less and negative correlation when compared with equities and bonds. We have analyzed the results through secondary data i.e. from research papers and also we have collected the auctions results of various paintings from auction houses to find the returns while diversifying in portfolio. In this research we have studied in depth about art as an alternative asset class, and has examine clearly that how this new alternative asset is expected to perform in bear markets, when the advantages of diversification are most required. To find the result that whether art is an alternate investment or not we have analyzed the data of Top 15 artists for the last 5 years i.e. from 2010-2015. We have compared the data of these artists with the Top 15 companies trading under Bombay Stock Exchange, we have collected the market capitalization of the companies and then we will find the correlations between the results between the two. Also, we have applied a trend analysis to find the results that how art has been emerged as an alternative asset. From these results we found that how art can be used as an investment option to diversify the portfolio.
Abstract:
This study examines the impact of interdisciplinarity on the market value and artistic legitimacy of 945 living artists from 2000 to 2020. Market value is measured using cumulative auction sales from Artprice.com, while artistic legitimacy is assessed through Artfacts’ global ranking. Interdisciplinarity is evaluated based on the number of disciplines practiced and the concentration of production. Controlling various quality signals, types of work produced, and individual artist characteristics, we employ a heteroscedasticity-corrected model to estimate the relationship between interdisciplinary practices and both artist value and legitimacy. Our findings indicate that interdisciplinarity enhances artistic legitimacy and, in certain cases, increases market value. These results provide valuable insights for contemporary art investors' strategies.
Acknowledgments: We are grateful to the anonymous reviewers (Finance Research Letters) for their insightful comments and suggestions, which have greatly contributed to improving this article, to our colleagues for their helpful remarks during our seminars, and to Jeanne Briquet and Ylang Dahilou for our enriching discussions on Deleuze, Fuchs, and the Artnet data.
Purpose
Art investment is generally believed to be risky with a high expected return. In this paper, we empirically find that art investors’ behavior is consistent with this general belief, showing consistency between their perception and behavior.
Design/methodology/approach
Using the Fama–French asset pricing factor models, we conduct an empirical investigation into fine arts investment in relation to financial risk factors. The risk and return profiles of art investments are then compared with those of traditional investments to determine alignment with investor perceptions.
Findings
We find that art investment is riskier than other traditional assets but does not provide enough financial gain to compensate the art investor, which indicates that it is not as attractive as it is believed. While there is consistency between art investors’ perception and behavior, there is also a discrepancy between their perception and reality.
Originality/value
The research identifies potential reasons for this misperception and highlights the non-monetary benefits and hidden sources of utility, suggesting that art investors may still be rational despite the less attractive financial performance compared to traditional assets.
Sanat piyasaları sanatçılar, koleksiyoncular, müzayede evleri, galeriler, müzeler gibi farklı kesimlere hitap eden, resim, heykel, fotoğraf ve grafik gibi çeşitli sanat eserlerini içeren, yatırım davranışlarının estetik algısı, kişisel zevkler, imaj kaygısı ve getiri beklentisi gibi çeşitli satın alma motivasyonlarıyla güdülenebildiği, finansal piyasalardan oldukça farklı fakat portföy çeşitlendirmesinde büyük potansiyele sahip piyasalardırlar. Geçmişi 17. yüzyıla kadar dayanan sanat eseri yatırımlarının portföy yönetimi çerçevesinde değerlendirilmesi oldukça yeni bir konudur. Sanat eseri yatırımlarıyla ilgili akademik çalışmalar 1960’lı yıllarda başlamış olsa da konuya portföy yönetimi çerçevesinde yaklaşan çalışmalar 1990’ların sonunda baş göstermişlerdir.
Bu kitapta, farklı yatırımcı tipleri için farklı yatırım ufuklarına göre sanat eseri yatırımlarının portföy çeşitlendirmesinde alternatif bir yatırım aracı olarak kullanılabilirliği modern portföy yönetimi çerçevesinde araştırılmıştır. Kitabın birinci bölümünde, portföy yönetiminin esasları açıklanarak geleneksel ve modern portföy yönetim teorileri hakkında detaylı bilgilere yer verilmiştir. İkinci bölümde, sanat piyasası ve temel sanat endekslerine ilişkin temel bilgiler verilmiş ve sanat eserleri ile portföy yatırımları ilişkisi ilgili literatür dikkate alınarak tartışılmıştır. Üçüncü bölümde, sanat eseri yatırımları üzerine gerçekleştirilmiş ulusal ve uluslararası bilimsel çalışmalardan oluşan literatür araştırmasına yer verilmiştir. Dördüncü ve son bölümde ise, sanat eseri yatırımlarının portföy çeşitlendirmesinde kullanımına ilişkin gerçekleştirilen analizler ve elde edilen bulgulara yer verilmiştir.
This book takes a novel, data-driven approach to the cemeteries of Paris, analysing a largely text-based body of archival material as proxy evidence for visual material that has been lost due to systematic, and legally sanctioned, acts of erasure.
This study represents the first full-length study of vernacular monuments in France and the entrepreneurs who made them. It also provides methodical considerations, at the intersection of the computational and digital humanities for managing survival biases in extant historical evidence, that are applicable beyond the thematic focus of this book. Since extant examples of these more inconspicuous monuments are rare, this project employs both distant and close viewing—analyzing commercial almanacs, work logs, and burial records in aggregates alongside detailed case studies—to compensate for gaps in the material record.
The book will be of interest to scholars working in visual culture, popular culture, digital humanities and French history.
En este artículo se lleva a cabo un estudio sobre la rentabilidad de la pintura contemporánea española en relación con las ventas en subasta en la última década. Para ello, se han seleccionado veinte artistas españoles de la segunda mitad del siglo XX, en virtud del volumen de negocio generado dentro del mercado del arte a nivel nacional e internacional, y se han analizado tanto sus obras como los métodos de venta y las plazas en las que se realizaron de forma que, a partir de los datos pudiéramos extraer reflexiones sobre sus rentabilidades, tendencias coleccionistas y cifra de negocios del sector en estos años. Entre los resultados de la investigación se han reflejado las diferentes circunstancias de la pintura de los artistas nacionales en subasta, así como la trascendencia cultural y económica de estos, en el mercado internacional y nacional. Demostrando cómo el sector del arte contemporáneo que en los últimos años se vislumbraba como uno de los periodos más demandados por los coleccionistas, durante los periodos de recesión económica parece retraerse, en pro de la pintura de periodos anteriores o de artistas plenamente consolidados. Una tendencia que recuerda a lo acaecido durante la etapa de la crisis económica de 2008, cuando las motivaciones de compra de los coleccionistas tendieron hacia adquisiciones de obras de artistas plenamente consolidados en el mercado.
This dissertation studies the formation of prices on the art market and the auction mechanisms by using a unique hand-collected database. First, we examine different determinants of artworks’ prices but also of artworks’ probability of sale at auction. We bring to the literature a missing set of vertical differentiation determinants by focusing on the comic art market where the traded goods have a noteworthy hybrid nature. Also, we show that shared aesthetic judgments on liking and emotional responses to art from ordinary people (outsiders) and collectors (insiders) both have an impact on prices, by means of a questionnaire we created and of a consensus index we constructed. Then, we analyse oral outcry ascending auction mechanisms and we demonstrate that human auctioneers and auction houses are not neutral intermediary agents but that their behaviors and marketing efforts systematically influence the outcome of the sale, prices and the realized price-estimated price ratio. Finally, we explore whether and how the bid dynamics influence final prices and we show that aggressiveness of bids and the pace at various phases of the auction impact the price.
Resumen:
La numismática presenta piezas en las que su valor artístico, metálico o de rareza son motivo de interés y demanda para el coleccionismo y donde el valor histórico no guarda relación con su valor económico. Este trabajo propone y justifica la selección de los criterios y modelos de valoración escogidos para la realización de tasaciones objetivas de piezas numismáticas tan necesarias no solo en los mercados de coleccionismo sino para muchas otras cuestiones de ámbito judicial, económico o administrativo.
Abstract:
Numismatics features pieces whose artistic, metallic or rarity value is of interest and demand for collecting and where the historical value is not related to their economic value. This work proposes and justifies the selection of the criteria and valuation models chosen for the realization of objective appraisals of numismatic pieces, so necessary in the collecting markets as well as for many other judicial, economic, or administrative issues.
Inwestycje alternatywne zyskują na znaczeniu zwłaszcza w okresie perturbacji na rynkach finansowych. Ponadto z uwagi na niski współczynnik korelacji stóp zwrotu aktywów alternatywnych ze stopami zwrotu na rynku akcji czy też obligacji, mogą one być dodawane do portfeli inwestycyjnych w celu zwiększania efektywności tak skonstruowanych portfeli. Jednym z popularnych segmentów inwestycji alternatywnych, obok nieruchomości, dzieł sztuki, diamentów i win inwestycyjnych, powoli staje się rynek whisky inwestycyjnej. Porównanie stóp zwrotu w tym właśnie segmencie z innymi segmentami rynku finansowego jest utrudnione z uwagi mniejszą płynność rynku whisky niż chociażby akcji czy obligacji. Dlatego też zdecydowano się na zastosowanie trzech indeksów rynku whisky: Vintage 50, ICON 100 i Japanese ICON 100 w ujęciu miesięcznym. Uzyskane wyniki można zaliczyć do jednych z pierwszych na rynku polskim. W wielu przypadkach potwierdziły one inne badania z rynku świato¬wego dotyczące win inwestycyjnych, a z kolei w innych - zaprzeczyły im.
Metal casting technology reached at a very advanced point after the Second World War. When the war was over, many companies producing metal castings suffered a huge market loss and tried to create new markets and develop new products. Some companies, inspired by the rapid development of automobile production, started to produce toy model cars with the casting technique, which were generally made with sheet metal bending until then, using the moulding techniques they had advanced. In this study, the history of Lesney company, established after the Second World War, and the development of Matchbox’s product range will be discussed in the context of collecting and a collection object. Matchbox collections are the most common model car collections in the world. The status of the designed objects as collectible objects was investigated together with the history and development process of Matchbox cars production and collecting behaviour of consumer.
Inwestycje alternatywne zyskują na znaczeniu zwłaszcza w okresie perturbacji na rynkach finanso-wych. Ponadto z uwagi na niski współczynnik korelacji stóp zwrotu aktywów alternatywnych ze sto-pami zwrotu na rynku akcji czy też obligacji, mogą one być dodawane do portfeli inwestycyjnych w celu zwiększania efektywności tak skonstruowanych portfeli. Jednym z popularnych segmentów inwestycji alternatywnych, obok nieruchomości, dzieł sztuki, diamentów i win inwestycyjnych, powoli staje się rynek whisky inwestycyjnej. Porównanie stóp zwrotu w tym właśnie segmencie z innymi segmentami rynku finansowego jest utrudnione z uwagi mniejszą płynność rynku whisky niż chociażby akcji czy obligacji. Dlatego też zdecydowano się na zastosowanie trzech indeksów rynku whisky: Vintage 50, ICON 100 i Japanese ICON 100 w ujęciu miesięcznym. Uzyskane wyniki można zaliczyć do jednych z pierwszych na rynku polskim. W wielu przypadkach potwierdziły one inne badania z rynku świato-wego dotyczące win inwestycyjnych, a z kolei w innych-zaprzeczyły im. Słowa kluczowe: rynek finansowy, inwestycje alternatywne, rynek whisky inwestycyjnej Kody klasyfikacji JEL: G10, G14
Die vorliegende Arbeit widmet sich der Darstellung des Kunstmarktgeschehens und der Entscheidungsfindung von Galeristen. Ziel ist es aufzuzeigen, welche Auswirkungen Erfahrung und Expertise sowie ein begrenzter Informationszugang auf die angewandte Entscheidungslogik und das Entscheidungsverhalten von Galeristen haben. Sie behandelt die Thematik der kausalen und effektualen Entscheidungslogik und der unterschiedlichen Entscheidungsansätze von Novizen und Experten. Gemäß Sarasvathy (2001) tendieren Novizen zu kausaler und Experten zur effektualer Logik. Sie unterscheiden sich durch ihren Grad an Expertise, welche auf Deliberate Practice, Erfahrung und kontinuierlich erbrachter überragender Leistungserbringung basiert (Ericsson 2006; Mitchell et al. 2005:3, Dew et al. 2009: 289). Gegenstand der Untersuchung war die Beantwortung der Fragen, ob sich die Berufserfahrung, das Geschlecht und der akademische Werdegang des Galeristen auf die angewandte Entscheidungslogik auswirken. Die Ergebnisse belegen, dass die Berufserfahrung einen signifikanten Einfluss auf die angewandte Entscheidungslogik der Galeristen hat: Novizen-Galeristen präferieren die kausale Entscheidungslogik, Experten-Galeristen die effektuale. In Bezug auf das Geschlecht ist nachweisbar, dass Galeristinnen am häufigsten die kausale Entscheidungslogik anwenden. Dasselbe Bild stellt sich bei Galeristen – ungeachtet ihres Geschlechts – ohne akademische Ausbildung ein. Die Arbeit setzt zudem ihren Fokus auf die experimentelle Untersuchung des Preisbildungsverfahrens durch Galeristen, wobei insbesondere der etwaige Einfluss der Overconfidence im Mittelpunkt steht. Die Studienergebnisse lassen darauf schließen, dass ein signifikantes Maß an Overconfidence dazu führt, dass die Preise für Kunstwerke niedriger gesetzt werden. Zudem konnte ein Wissenseffekt festgestellt werden: Je versierter ein Galerist im Kunstmarkt ist, desto höher setzt er den Preis für ein als „ausstellungswürdig" deklariertes Kunstwerk.
This article examines the short- and long-run linkages among art market indexes between 1998 and 2016 using cointegration procedures, the Granger noncausality test and the Error Correction Model. These art indexes are examined by category: global, art method, time, and currency/country. The results indicate that there are a few causal linkages between art market indexes, notably that there is feedback between a few markets. These moderate causal links between art market indexes would indicate that there are many opportunities for diversification for practitioners, investors and collectors.
Research background: The dynamics of the art market are usually presented in terms of price fluctuations, price indexes and financial returns. This paper proposes the value and volume approach, which has not been considered in an aggregative way for a long time in the economic literature.
Purpose of the article: The aim of the paper is to present changes in the global art market in the period 2002–2015. The results of dynamic analysis of the art market are presented, including two approaches: value of transactions and volume of transactions. The impact of the global crisis on the art market is considered.
Methods: In order to present the changes on the global art market, statistical indexes of dynamics (single base and chain indexes) are used. Moreover, trend analyses have been conducted for the value and volume of transactions on the art market. The sources of data on the global art market are from Artprice, ArtTactic, and TEFAF (The European Fine Art Foundation).
Findings & Value added: In the analysed period of 2002–2015, sales on the global art market generally increased. The value and volume of sales peaked in 2007 and 2014. The art market was considerably affected by the economic recession in 2009, but in the next year it recovered. The trend analyses allow the changes on the market to be described by means of mathematical functions, and the countries with the largest share in the global art market can be identified. Particular attention has been paid to the existence of a triad on the art market consisting of Europe, the USA and China. It is noteworthy that Europe and the USA have rapidly lost market share to China.
W niniejszym omówiono zagadnienie ryzyka związanego z internetowymi aukcjami dzieł sztuki. Przegląd dotychczasowej literatury przedmiotu wskazuje, że jest ono podejmowane w sposób fragmentaryczny. Wobec braku klasyfikacji ryzyka dotyczącego rynku omawianych obiektów zostanie przeprowadzona w artykule dokonano identyfikacji rodzajów ryzyka związanego z handlem dziełami sztuki, w szczególności z uwzględnieniem specyfiki handlu elektronicznego. Artykuł ma charakter teoretyczny, a jego celem jest uporządkowanie i charakterystyka wyjątkowo zróżnicowanych źródeł ryzyka na rynku dzieł sztuki.
http://rocznikikae.sgh.waw.pl/p/roczniki_kae_z45_04.pdf
Research background: The dynamics of the art market is usually presented using price perspective, price indexes for the market and financial returns. In this paper the value and volume approach is proposed, that haven’t been considered in aggregative way for a longer period of time in the literature.
Purpose of the article: The presentation of changes taking place in the global art market in the period 2002-2015 is the aim of the paper. The results of dynamic analysis of the art market have been presented, including the two approaches: value and volume of transactions. The impact of the global crisis on the art market has been considered.
Methodology/methods: In order to present the changes on the global art market statistical indexes of dynamics (single base and chain indexes) have been used. Moreover the trend analyses have also been conducted for the value and volume of transactions on the art market. The sources of data on the global art market have come from Artprice, ArtTactic, TEFAF (The European Fine Art Foundation).
Findings: In the analyzed period 2002-2015 the changes of sales on the global art market had in general increasing tendency. The value and volume of sales have reached their tops in 2007 and 2014. The art market has been touched considerably by economic recession in 2009, but in the next year it has already staged a recovery. The trend analyses have allowed describing the changes on the market by means of mathematical functions. The analyses have allowed identifying the countries with the largest share in the global art market. A particular attention has been paid to the existence of triad on the art market, including the countries of Europe, USA and China. It is noteworthy that Europe and USA have dynamically lost their market share in favour of China.
Investment transactions have always depended on the confidence of investors to any product in which to invest their capital. The problem is that times of crisis such confidence is even more hit by market circumstances. Because of this, investors are wary of any product with high yield, as in the case of alternative investments in art. To restore the confidence of investors to these investments as profitable, our work aims to identify all the factors that can influence directly or indirectly in the evaluation of alternative investments in art. To do this, we performed a thorough literature review on any research, current and former, which has been studied any relevant factor in determining the value of art investment. Because of this, we have identified those variables that all authors agree as determining its future value. Thus, the investor can better understand the operation of art investment market, and thus restore the confidence you deserve. Especially in high economic instability periods such as the present. KEY WORDS: Profitability, art alternative investments, investment market, valuation, price variables. RESUMEN Las operaciones de inversión siempre han dependido de la confianza de los inversores hacia cualquier producto en el que invertir su capital. El problema radica en que tiempos de crisis dicha confianza se ve todavía más azotada por las circunstancias del mercado. Debido a esto, los inversores desconfían de cualquier producto con rentabilidad elevada, como es el caso de las inversiones alternativas en arte. Para devolver la confianza de los inversores a estas inversiones tan rentables, nuestro trabajo pretende identificar todos aquellos factores que pueden influir de manera directa o indirecta en la valoración de las inversiones alternativas en arte. Para ello, hemos realizado una profunda revisión bibliográfica sobre todas aquellas investigaciones, tanto actuales como anteriores, en las que se haya estudiado cualquier factor relevante para determinar el valor del arte de inversión. Debido a esto, hemos podido identificar aquellas variables que todos los autores coinciden
Purpose
This paper constructs a price index for Chinese oil paintings and analyzes the financial performance of investing in Chinese oil paintings and its potential for portfolio diversification in Chinese financial markets.
Design/methodology/approach
A hedonic regression model is applied to construct a semiannual price index for Chinese oil paintings from 2000 to 2014. The CAPM model, downside beta and standard portfolio optimization are used for analyzing portfolio diversification.
Findings
The hedonic regression shows that the majority of hedonic variables, such as dimension, artist’s reputation, living status, medium and auction houses, are statistically significant in estimation. Not only the return from oil painting investments is higher than other equities, but also the beta coefficient of the CAPM model and downside beta indicate that Chinese oil painting may be a good hedging instrument against stock market risk. Furthermore, the portfolio optimizations under standard assumptions suggest that oil paintings as an alternative investment provides diversification benefit.
Originality/value
This paper provides a new and comprehensive analysis of characteristics and risks of investing in the Chinese oil paintings.
This paper investigates the weak-form efficiency hypothesis for the art market. We consider 15 art price indices namely: Contemporary, Drawings, France, Global index (Euro), Global index (USD), Modern art, Nineteenth century, Old Masters, Paintings, Photographies, Postwar, Prints, Sculptures, UK and US. We use quarterly data from 1998:1 to 2015: 1. We employ both standard and non-parametric single and joint variance ratio tests while accounting for small sample bias through the use of the wild bootstrapping. We show that the majority of the art markets are inefficient with the exception of the Old Masters that consistently prove efficient under both individual and joint variance ratio tests. To a lesser extent Contemporary, US and UK markets are also efficient. However, confronting the data with both linear and nonlinear long memory models as robustness check, we observe that Paints, Prints, Photographies, Nineteenth century, Modern Art, US, France and Drawings have unit roots and are therefore efficient. Others such as Post war Sculpture, and Contemporary have values of the fractional parameter d significantly different from 0 and 1 and they may be considered efficient as well in a number of cases. The US and Contemporary art markets appear to be efficient irrespective of the method used.
In this study I examine the absolute and time-varying weak-form market efficiency of the international sculpture auction market. The results indicate that the sculpture market efficiency varies over time lending support to the Adaptive Markets Hypothesis. Moreover, I find that the times of peaking relative market inefficiency coincide with distress in the wider economy and financial markets. Additionally, I find evidence that auction house art experts' pre-sale estimate accuracy Granger causes developments in time-varying market efficiency, highlighting the importance of art experts.
Monografia przybliża Czytelnikowi świat następujących obszarów inwestycji alternatywnych:
a) sztuka,
b) alkohole inwestycyjne,
c) znaczki,
d) zabawki,
e) płyty winylowe
Using hedonic pricing, prices realised at auction are estimated against artwork characteristics for New Zealand for over 27,000 artworks by over 1600 artists. The data-set is larger and more representative of an art market, especially for lower prices, than all other art price studies. The number of works by each artist auctioned over the entire period is a measure of each artist's market presence. Sample selection bias created by unsold artworks is corrected using the Heckit method. Estimation results including the creation of the first New Zealand art price index are presented and interpreted.
Mutual funds have become a popular structure for investors seeking exposure to financial markets. With thousands of funds in operation, it is unsurprising that mutual funds have become the largest means of investment in the USA, with almost $7.5 trillion of assets held at the beginning of 2004.1 The structure provides investors with an opportunity to participate in securities markets without having to become money managers themselves. Furthermore, by pooling small amounts of money into a single fund value, individual investors are able to participate in investment strategies that would have otherwise been financially unfeasible.
Art market in Poland is developing and the investment in art attracts the attention of Polish investors. In order to evaluate the performance of the certain type of assets, the expected returns, which can be received, are to be calculated. In case of the heterogenic goods, such as art, the hedonic price index approach is often applied. The art price indexes are calculated for the individual artists, the whole market, and its segments. The aim of the paper is to evaluate the individual hedonic price indexes for 17 Polish painters, representing the auction market in Poland, and to estimate the returns from the paintings market, described by the "basket" of the selected artists. This research applies the hedonic regression methodology and the aggregated hedonic index, using data of 1710 artworks, which were traded on the auctions that took place in Poland in the years 2007-2013.
The demand for art today is higher than ever before. Auction houses report record turnovers and absolute top prices are paid in increasingly rapid sequence. Only some years ago, Turner’s Seascape: Folkstone had an auction price of 9.9 million at Sotheby’s New York, and Mantegna’s Adoration of the Magi sold at Christie’s London for 39.9 million. In 1907, 17 years after van Gogh’s death, Sunflowers was offered at an exhibition in Mannheim for DM 12,000 (roughly 7,000). Edith Batty is said to have acquired it in 1934 for DM 63,000 (about 5.83 million; he sold it by auction in 1989 for $47.85 million, achieving a real net rate of return of 19.6% per annum.
ResearchGate has not been able to resolve any references for this publication.