Investment Returns and Economic Fundamentals in International Art Markets
AbstractAbstract: Works of art are neither easily tradable across borders, nor evaluated according to globally identical standards. We examine geographical segmentation and its effects on price formation and returns in the international art auction market. We find (i) a close connection between the country of sale and the type (e.g., nationality) of artworks sold; (ii) substantial international variation in average returns to art investments over the period 1971-2007; (iii) an impact of both global and local GDP growth and equity returns on national art market returns. Local fundamentals have not lost importance over time, despite increased economic integration (especially between the EU countries). Yet, country-specific economic factors matter less in determining the auction outcomes for high-end art. Our findings suggest the continuing importance of international demand differences in shaping the global art market, at least outside the top segment.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2014-018.
Date of creation: 2014
Date of revision:
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Web page: http://center.uvt.nl
Economics of art; art markets; home bias; geographical market segmentation; art auctions; hedonic regression;
Find related papers by JEL classification:
- Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-03-08 (All new papers)
- NEP-CUL-2014-03-08 (Cultural Economics)
- NEP-EUR-2014-03-08 (Microeconomic European Issues)
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