Buying Beauty: On Prices and Returns in the Art Market
By Luc Renneboog, Christophe Spaenjers. Management Sciences, 2013
360 citations recorded by the source corpus.
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.
Subfields: Cognitive Neuroscience, Tourism, Leisure and Hospitality Management, Visual Arts and Performing Arts
View Paper: https://www.semanticscholar.org/paper/f56a4e7e9cd1ac1e9d7c7a74cdd965f12e97b113
Citations in the corpus
- THE PRICE OF ART (2013, neutral): “Finding commodities of the type studied that differ in various properties is sufficient to attribute differences in price to their differing properties (Rosen 1974; Chanel et al. 1996; Renneboog and Spaenjers 2010).”
- Virtual currency, tangible return: Portfolio diversification with bitcoin (2015, neutral): “4 Bitcoins are typically stored in 1 Yet, alternative investment goods, such as artworks, deliver mixed financial results (David et al., 2013; Renneboog and Spaenjers, 2013).”
- The Price of Wine (2015, neutral): “Hedonic models relate transaction prices to their value-determining characteristics (Rosen, 1974) and are commonly used to study price formation in markets for infrequently traded assets such as real estate (e.g., Campbell, Giglio, and Pathak, 2011) and art (e.g., Renneboog and Spaenjers, 2013).”