Management Science· 2012Q1
Buying Beauty: On Prices and Returns in the Art Market
- 378citations
- Q1SCImago
- 2012year
Short summary
Art has appreciated 3.97% annually in real USD terms between 1957-2007, similar to corporate bonds but with higher risk, based on analysis of over one million auction transactions.
AI-generated from the title and abstract; the full text is not read.
Key points
- Art appreciated 3.97% annually in real USD terms (1957-2007).
- Art's investment performance is comparable to corporate bonds but with higher risk.
- More expensive art segments show higher appreciation and volatility.
- Art market sentiment and high-income consumer confidence predict price trends.
AI-generated from the title and abstract; the full text is not read.
Abstract
This paper investigates the price determinants and investment performance of art. We apply a hedonic regression analysis to a new data set of more than one million auction transactions of paintings and works on paper. Based on the resulting price index, we conclude that art has appreciated in value by a moderate 3.97% per year, in real U.S. dollar terms, between 1957 and 2007. This is a performance similar to that of corporate bonds—at much higher risk. A repeat-sales regression on a subset of the data demonstrates the robustness of our index. Next, quantile regressions document larger average price appreciations (and higher volatilities) in more expensive price brackets. We also find variation in historical returns across mediums and movements. Finally, we show that measures of high-income consumer confidence and art market sentiment predict art price trends. This paper was accepted by Wei Xiong, finance.
The authors' abstract, as published at the source. Management Science, 2012 · DOI ↗
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Field: Visual Arts and Performing Arts
Visual Arts and Performing ArtsArts and Humanities