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The impact of the Droit de Suite in the UK: an empirical analysis

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  • Chanont Banternghansa
  • Kathryn Graddy

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Abstract

The Droit de Suite, known in the UK as Artists’ Resale Rights, provides an artist with the inalienable right to receive a royalty based on the resale price of an original work of art. This paper provides an empirical analysis of actual changes in the UK auction market for art that is subject to the Droit de Suite (DDS), relative to changes for art not subject to the DDS, and also relative to changes in the auction markets for art in countries where there has been no change in law. We do a difference-in-difference analysis, differencing price growth and sales growth across market segments and across countries over the period 1996 to 2007. Our results suggest that the introduction of the DDS has not had a negative impact on the UK art auction market.

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Bibliographic Info

Article provided by Springer in its journal Journal of Cultural Economics.

Volume (Year): 35 (2011)
Issue (Month): 2 (May)
Pages: 81-100

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Handle: RePEc:kap:jculte:v:35:y:2011:i:2:p:81-100

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Web page: http://www.springerlink.com/link.asp?id=100284

Related research

Keywords: Droit de suite; Art; Art auctions; Price; Tax;

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References

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  1. Karl E. Case & Robert J. Shiller, 1987. "Prices of Single Family Homes Since 1970: New Indexes for Four Cities," Cowles Foundation Discussion Papers 851, Cowles Foundation for Research in Economics, Yale University.
  2. Ginsburgh, Victor, 2005. "The Economic Consequences of Droit De Suite in the European Union," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, Queensland University of Technology (QUT), School of Economics and Finance, vol. 35(1-2), pages 61-71, March/Sep.
  3. 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.
  4. Alan Beggs & Kathryn Graddy, 2008. "Failure to meet the reserve price: the impact on returns to art," Journal of Cultural Economics, Springer, Springer, vol. 32(4), pages 301-320, December.
  5. Victor Ginsburgh, 2003. "Art markets," ULB Institutional Repository 2013/1865, ULB -- Universite Libre de Bruxelles.
  6. Jianping Mei & Michael Moses, 2005. "Vested Interest and Biased Price Estimates: Evidence from an Auction Market," Journal of Finance, American Finance Association, American Finance Association, vol. 60(5), pages 2409-2435, October.
  7. Kathryn Graddy & Orley Ashenfelter, 2002. "Auctions and the Price of Art," Economics Series Working Papers 131, University of Oxford, Department of Economics.
  8. 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.
  9. John Solow, 1998. "An Economic Analysis of the Droit de Suite," Journal of Cultural Economics, Springer, Springer, vol. 22(4), pages 209-226, December.
  10. Alan Beggs & Kathryn Graddy, 2009. "Anchoring Effects: Evidence from Art Auctions," American Economic Review, American Economic Association, vol. 99(3), pages 1027-39, June.
  11. Jianping Mei & Michael Moses, 2002. "Art as an Investment and the Underperformance of Masterpieces," American Economic Review, American Economic Association, vol. 92(5), pages 1656-1668, December.
  12. Kräussl, Roman & Elsland, Niels van, 2008. "Constructing the true art market index: A novel 2-step hedonic approach and its application to the German art market," CFS Working Paper Series 2008/11, Center for Financial Studies (CFS).
  13. Chanel, O. & Gerard, L.A. & Ginsburgh, V., 1992. "The Relevence of Hedonic Price Indices the Case of Paintings," G.R.E.Q.A.M., Universite Aix-Marseille III 92a19, Universite Aix-Marseille III.
  14. Karp, Larry & Perloff, Jeffrey M, 1992. "Legal Requirements that Artists Receive Resale Royalties," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series, Department of Agricultural & Resource Economics, UC Berkeley qt33f9k5bw, Department of Agricultural & Resource Economics, UC Berkeley.
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Cited by:
  1. Elisabetta Lazzaro & Nathalie Moureau, 2013. "Auctioneers vs. commissaires-priseurs: The carnival mirror of profession regulation in the international art market," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 10(2), pages 159-176, August.

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