This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

On the valuation of psychic returns to art market investments

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Erdal Atukeren () (ETH Zurich, KOF - Swiss Economic Institute)
Aylin Seçkin () (Istanbul Bilgi University)

Additional information is available for the following registered author(s):

Abstract

Investing in art objects yields financial and psychic returns. The psychic returns arise since art has a superior consumption good aspect as well. The question is whether it is possible to measure the psychic returns. One valuation method for estimating the psychic returns to investing in artworks is their rental price. Here, we make use of the prices charged by a Canadian fine art company for its art rental services and calculate the implied psychic returns to be about 28 percent. Next, we review the finance-theoretic approaches to measuring the psychic returns to investing in artworks. We follow Hodgson and Vorkink’s (2004, Canadian Journal of Economics) suggestion that the alpha parameter in the CAPM captures the extent of net psychic returns. The evidence on alpha from the art market applications of the CAPM coupled with the transaction cost data from international art auctions also suggests that the psychic returns to investing in artworks might amount to about 28 per cent.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://economicsbulletin.vanderbilt.edu/2007/volume26/EB-07Z10027A.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Article provided by Economics Bulletin in its journal Economics Bulletin.

Volume (Year): 26 (2007)
Issue (Month): 5 ()
Pages: 1-12
Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Handle: RePEc:ebl:ecbull:v:26:y:2007:i:5:p:1-12

Contact details of provider:
Postal: Economics Bulletin, Department of Economics, 414 Calhoun Hall, Vanderbilt University, Nashville TN 37235, USA
Phone: 615-322-2920
Fax: 615-343-8495
Email:
Web page: http://www.economicsbulletin.com

For technical questions regarding this item, or to correct its listing, contact: (John Conley).

Related research
Keywords: Art market applications of the CAPM Economics of art markets Market for paintings. Psychic returns

Find related papers by JEL classification:
Z1 - Other Special Topics - - Cultural Economics
G1 - Financial Economics - - General Financial Markets

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Douglas Hodgson & Keith Vorkink, 2004. "Asset pricing theory and the valuation of Canadian paintings," Canadian Journal of Economics, Canadian Economics Association, vol. 37(3), pages 629-655, August. [Downloadable!] (restricted)
  2. Orley Ashenfelter & Kathryn Graddy, 2003. "Auctions and the Price of Art," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 763-787, September.
    Other versions:
  3. Michael F. Bryan, 1985. "Beauty and the bulls: the investment characteristics of paintings," Economic Review, Federal Reserve Bank of Cleveland, issue Q I, pages 2-10. [Downloadable!]
  4. Anderson, Robert C, 1974. "Paintings as an Investment," Economic Inquiry, Oxford University Press, vol. 12(1), pages 13-26, March.
  5. Stein, John Picard, 1977. "The Monetary Appreciation of Paintings," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 1021-35, October. [Downloadable!] (restricted)
  6. Pesando, James E, 1993. "Art as an Investment: The Market for Modern Prints," American Economic Review, American Economic Association, vol. 83(5), pages 1075-89, December. [Downloadable!] (restricted)
  7. Benjamin J. Burton & Joyce P. Jacobsen, 1999. "Measuring Returns on Investments in Collectibles," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 193-212, Fall. [Downloadable!] (restricted)
  8. Andrew C. Worthington & Helen Higgs, 2003. "Art as an investment: Short and long-term comovements in major painting markets," Empirical Economics, Springer, vol. 28(4), pages 649-668, November. [Downloadable!] (restricted)
  9. Baumol, William J, 1986. "Unnatural Value: Or Art Investment as Floating Crap Game," American Economic Review, American Economic Association, vol. 76(2), pages 10-14, May. [Downloadable!] (restricted)
  10. Throsby, David, 1994. "The Production and Consumption of the Arts: A View of Cultural Economics," Journal of Economic Literature, American Economic Association, vol. 32(1), pages 1-29, March. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? RePEc and its associated services are free for contributors and users, and do not accept any advertising.

This page was last updated on 2008-7-12.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.