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Selling Picasso paintings: the efficiency of auction houses

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Author Info
Finn R. Førsund ()
Roberto Zanola ()

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Abstract

Previous works applying hedonic price technique to determine the formation of auction prices of objects of art have found no conclusive result about the impact of auction houses on final prices. In these studies the object of art has been the unit, and influence of auction houses is analysed by testing whether auction house impact on price is significant or not within a framework of central tendencies. In order to focus on auction houses as a unit we have applied a benchmarking technique, DEA, developed for efficiency studies. Categorial and continuous variables are used as inputs and auction prices as outputs. Performance indicators are defined and calculated giving an insight into auction house differences impossible to obtain using hedonic price approach.

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Publisher Info
Paper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 07-2001.

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Length: 32 pages
Date of creation: May 2001
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Handle: RePEc:icr:wpicer:07-2001

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Keywords: painting auction house hedonic price DEA efficiency

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Find related papers by JEL classification:
C6 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming
D2 - Microeconomics - - Production and Organizations
Z1 - Other Special Topics - - Cultural Economics

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. Tulkens, H. & Vanden Eeckaut, P., 1993. "Non-parametric Efficiency, Progress and Regress Measures for Panel data: Methodological Aspects," Papers 9316, Catholique de Louvain - Center for Operations Research and Economics.
    Other versions:
  2. Combris, Pierre & Lecocq, Sebastien & Visser, Michael, 1997. "Estimation for a Hedonic Price Equation for Bordeaux Wine: Does Quality Matter?," Economic Journal, Royal Economic Society, vol. 107(441), pages 390-402, March. [Downloadable!] (restricted)
  3. G. Candela & A. Scorcu, 1997. "A Price Index for Art Market Auctions," Journal of Cultural Economics, Springer, vol. 21(3), pages 175-196, September. [Downloadable!] (restricted)
  4. Locatelli-Biey, Marilena & Zanola, Roberto, 2000. "The Market for Sculptures: an Adjacent Year Regression Index," P.O.L.I.S. department's Working Papers 14, Department of Public Policy and Public Choice - POLIS. [Downloadable!]
  5. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb.. [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. 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)
  8. Forsund,F.R. & Sarafoglou,N., 2000. "On the origins of data envelopment analysis," Memorandum 24/2000, Oslo University, Department of Economics. [Downloadable!]
  9. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-44, June. [Downloadable!] (restricted)
  10. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July. [Downloadable!] (restricted)
  11. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November. [Downloadable!] (restricted)
  12. Finn R. Førsund, 2001. "Categorical variables in DEA," ICER Working Papers 06-2001, ICER - International Centre for Economic Research. [Downloadable!]
  13. Tulkens, Henry & Vanden Eeckaut, Philippe, 1995. "Non-parametric efficiency, progress and regress measures for panel data: Methodological aspects," European Journal of Operational Research, Elsevier, vol. 80(3), pages 474-499, February. [Downloadable!] (restricted)
  14. Buelens, Nathalie & Ginsburgh, Victor, 1993. "Revisiting Baumol's 'art as floating crap game'," European Economic Review, Elsevier, vol. 37(7), pages 1351-1371, October. [Downloadable!] (restricted)
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  15. Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-98, October. [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. Finn R. Førsund, 2001. "Categorical variables in DEA," ICER Working Papers 06-2001, ICER - International Centre for Economic Research. [Downloadable!]
  2. Finn R. Førsund & Roberto Zanola, 2002. "The performance of auction houses selling Picasso Prints," ICER Working Papers 30-2002, ICER - International Centre for Economic Research. [Downloadable!]
    Other versions:
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