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Paintings and Numbers: An Econometric Investigation of Sales Rates, Prices and Returns in Latin American Art Auctions

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Barbosa, Renata Leite
Campos, Nauro F

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Abstract

This paper uses a unique data set of Latin American paintings auctioned by Sotheby's between 1995 and 2002 to investigate several puzzles from the recent auctions literature. Our results suggest that: (1) the reputation of an artist and the provenance of the artwork, omitted variables in most previous studies, seem to be more important determinants of the sale price of a painting than standard factors, such as medium and size, (2) the opinion of art experts seems to be of limited use in predicting whether or not an artwork sells at auction, (3) there is little supporting evidence for the widespread notion that the best or more expensive artworks tend to generate above average returns (the "masterpiece effect"), although (4) there is strong evidence in our data for the declining price anomaly, or "afternoon effect."

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6806.

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Date of creation: Apr 2008
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Handle: RePEc:cpr:ceprdp:6806

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Related research
Keywords: art auctions; declining price anomaly; Latin American art; masterpiece effect;

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Find related papers by JEL classification:
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
Z10 - Other Special Topics - - Cultural Economics - - - General

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    Other versions:
  3. 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)
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