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Financial returns, price determinants, and genre effects in American art investment

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Author Info
Richard Agnello
Renée Pierce
Abstract

Past studies on art investment, generally have found that returns are low and risk is high. In this study we find that the return to art investment is more in line with traditional investments and thus the cost for consumption associated with art seems fairly small. Employing a large sample of paintings by 66 American artists sold at auction between 1971–1992, average returns are found to be over 9 per cent and 3 per cent in nominal and real terms, respectively. The model employs a log linear price regression estimated by pooled cross section and time series data, and allows rates of return as well as hedonic values for various painting and auction attributes to be estimated. These include size, media, age of execution, authenticity of the work, and auction month and house. In addition, rates of return are differentiated by artist, time period of investment, price range and genre of the painting. The findings indicate significant sensitivity of rates of return to these data stratifications. Copyright Kluwer Academic Publishers 1996

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File URL: http://hdl.handle.net/10.1007/s10824-005-0383-0
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Publisher Info
Article provided by Springer in its journal Journal of Cultural Economics.

Volume (Year): 20 (1996)
Issue (Month): 4 (December)
Pages: 359-383
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:kap:jculte:v:20:y:1996:i:4:p:359-383

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Related research
Keywords: returns to art investment; hedonic price regressions for paintings;

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. Ashenfelter, Orley & Genesove, David, 1992. "Testing for Price Anomalies in Real-Estate Auctions," American Economic Review, American Economic Association, vol. 82(2), pages 501-05, May. [Downloadable!] (restricted)
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  2. Ginsburgh, Victor & Jeanfils, Philippe, 1995. "Long-term comovements in international markets for paintings," European Economic Review, Elsevier, vol. 39(3-4), pages 538-548, April. [Downloadable!] (restricted)
  3. 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)
  4. 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)
  5. Olivier Chanel & Louis-André Gérard-Varet & Victor Ginsburgh, 1996. "The relevance of hedonic price indices," Journal of Cultural Economics, Springer, vol. 20(1), pages 1-24, March. [Downloadable!] (restricted)
  6. Goetzmann, William N, 1993. "Accounting for Taste: Art and the Financial Markets over Three Centuries," American Economic Review, American Economic Association, vol. 83(5), pages 1370-76, December. [Downloadable!] (restricted)
  7. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer. [Downloadable!] (restricted)
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(explanations, 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. Helen Higgs & Andrew C Worthington, 2004. "Financial returns and price determinants in the Australian art market, 1973-2003," School of Economics and Finance Discussion Papers and Working Papers Series 184, School of Economics and Finance, Queensland University of Technology. [Downloadable!]
  2. Louis Lévy-Garboua & Claude Montmarquette, 2002. "The Demand for the Arts," CIRANO Working Papers 2002s-10, CIRANO. [Downloadable!]
  3. Nicoletta Marinelli & Giulio Palomba, . "A Model for Pricing the Italian Contemporary Art Paintings at Auction," EHUCHAPS, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística). [Downloadable!]
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