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How Did Japanese Investments Influence International Art Prices?

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  • Hiraki, Takato
  • Ito, Akitoshi
  • Spieth, Darius A.
  • Takezawa, Naoya

Abstract

We test the luxury consumption hypothesis of Ait-Sahalia, Parker, and Yogo (2004), using a unique international art price, import/export flow, and stock market data set. We find that the demand for art by Japanese collectors is positively correlated with art prices and Japanese stock prices. This correlation is magnified during the “bubble period” of the Japanese economy (the mid-1980s to the early 1990s) and gains even further strength for works of art typically favored by Japanese collectors. Our results suggest that Japanese investors (or Japanese asset markets) indeed affect international art prices—especially during the bubble period and its aftermath.

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  • Hiraki, Takato & Ito, Akitoshi & Spieth, Darius A. & Takezawa, Naoya, 2009. "How Did Japanese Investments Influence International Art Prices?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 44(06), pages 1489-1514, December.
  • Handle: RePEc:cup:jfinqa:v:44:y:2009:i:06:p:1489-1514_99
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    Cited by:

    1. Spaenjers, C., 2011. "Essays in alternative investments," Other publications TiSEM 8c51041f-6a63-451f-b7f4-8, Tilburg University, School of Economics and Management.
    2. Pénasse, Julien & Renneboog, Luc & Spaenjers, Christophe, 2014. "Sentiment and art prices," Economics Letters, Elsevier, pages 432-434.
    3. William N. Goetzmann & Luc Renneboog & Christophe Spaenjers, 2011. "Art and Money," American Economic Review, American Economic Association, pages 222-226.
    4. Arthur Korteweg & Roman Kräussl & Patrick Verwijmeren, 2016. "Does it Pay to Invest in Art? A Selection-Corrected Returns Perspective," Review of Financial Studies, Society for Financial Studies, vol. 29(4), pages 1007-1038.
    5. Kim Oosterlinck, 2013. "Art as a Wartime Investment: Conspicuous Consumption and Discretion," Working Papers CEB 13-039, ULB -- Universite Libre de Bruxelles.
    6. Renneboog, L.D.R. & Spaenjers, C., 2014. "Investment Returns and Economic Fundamentals in International Art Markets," Discussion Paper 2014-018, Tilburg University, Center for Economic Research.
    7. Spaenjers, Christophe & Goetzmann, William N. & Mamonova, Elena, 2015. "The economics of aesthetics and record prices for art since 1701," Explorations in Economic History, Elsevier, vol. 57(C), pages 79-94.
    8. Luc Renneboog & Christophe Spaenjers, 2013. "Buying Beauty: On Prices and Returns in the Art Market," Management Science, INFORMS, pages 36-53.
    9. Dimson, Elroy & Spaenjers, Christophe, 2011. "Ex post: The investment performance of collectible stamps," Journal of Financial Economics, Elsevier, vol. 100(2), pages 443-458, May.
    10. Coslor, Erica & Spaenjers, Christophe, 2016. "Organizational and epistemic change: The growth of the art investment field," Accounting, Organizations and Society, Elsevier, vol. 55(C), pages 48-62.
    11. Kräussl, Roman & Lehnert, Thorsten & Martelin, Nicolas, 2016. "Is there a bubble in the art market?," Journal of Empirical Finance, Elsevier, pages 99-109.
    12. Kräussl, Roman & Lehnert, Thorsten & Martelin, Nicolas, 2016. "Is there a bubble in the art market?," Journal of Empirical Finance, Elsevier, pages 99-109.
    13. William Goetzmann & Elena Mamonova & Christophe Spaenjers, 2014. "The Economics of Aesthetics and Three Centuries of Art Price Records," NBER Working Papers 20440, National Bureau of Economic Research, Inc.
    14. Penasse, J.N.G. & Renneboog, L.D.R., 2014. "Bubbles and Trading Frenzies : Evidence from the Art Market," Discussion Paper 2014-068, Tilburg University, Tilburg Law and Economic Center.
    15. Kräussl, Roman & Mirgorodskaya, Elizaveta, 2016. "The winner's curse on art markets," CFS Working Paper Series 564, Center for Financial Studies (CFS).

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