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Hedonic Models and Pre-Auction Estimates: Abstract Art Revisited

Author

Listed:
  • Calin Valsan

    () (Bishop's University)

  • Robert Sproule

    () (Bishop's University)

Abstract

We investigate the predictive power of hedonic models compared to that of pre-auction estimates in the context of art auctions. We use a panel data consisting of abstract paintings and a methodology that employs the estimates as instrumental variables in the framework of a hedonic regression model. The results suggest that hedonic models have no better predictive power than that of the estimates. Pre-auction estimates appear to fully account for the available public information on works of art.

Suggested Citation

  • Calin Valsan & Robert Sproule, 2006. "Hedonic Models and Pre-Auction Estimates: Abstract Art Revisited," Economics Bulletin, AccessEcon, vol. 26(5), pages 1-10.
  • Handle: RePEc:ebl:ecbull:eb-06z10132
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    References listed on IDEAS

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    1. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, pages 23-36.
    2. Alan Beggs & Kathryn Graddy, 1997. "Declining Values and the Afternoon Effect: Evidence from Art Auctions," RAND Journal of Economics, The RAND Corporation, pages 544-565.
    3. Clare M D'Souza & David Prentice, 2001. "Auctioneer Strategy and Pricing: Evidence from an Art Auction," Working Papers 2001.05 EDIRC Provider-In, School of Economics, La Trobe University.
    4. BAUWENS, Luc & GINSBURGH, Victor, 2000. "Art experts and auctions are pre-sale estimates unbiased and fully informative?," CORE Discussion Papers RP 1485, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Robert Ekelund & Rand Ressler & John Watson, 1998. "Estimates, Bias and “No Sales” in Latin-American Art Auctions, 1977–1996," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, pages 33-42.
    6. Jianping Mei & Michael Moses, 2005. "Vested Interest and Biased Price Estimates: Evidence from an Auction Market," Journal of Finance, American Finance Association, vol. 60(5), pages 2409-2435, October.
    7. Beggs, A. & Graddy, K., 1996. "Declining Values and the Afternoon Effect: Evidence from Art Auctions," Economics Series Working Papers 99184, University of Oxford, Department of Economics.
    8. Chanel, O. & Gerard-Varet, L.A., 1996. "Auction Theory and Practice Evidence from the Market for Jewellery," G.R.E.Q.A.M. 96b05, Universite Aix-Marseille III.
    9. Corinna Czujack & Maria Fraga Martins, 2004. "Do art specialists form unbiased pre-sale estimates? An application for Picasso paintings," Applied Economics Letters, Taylor & Francis Journals, vol. 11(4), pages 245-249.
    10. Werner Pommerehne & Lars Feld, 1997. "The Impact of Museum Purchase on the Auction Prices of Paintings," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, pages 249-271.
    11. Richard J. Agnello, 2002. "Investment Returns and Risk for Art: Evidence from Auctions of American Paintings," Eastern Economic Journal, Eastern Economic Association, vol. 28(4), pages 443-463, Fall.
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    Cited by:

    1. Ünsal Özdilek, 2013. "Visual autocorrelation of prices," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, pages 203-223.
    2. François Maréchal & Pierre-Henri Morand, 2012. "The public release of information in first-price sealed-bid auctions," Review of Economic Design, Springer;Society for Economic Design, pages 323-330.
    3. Bruno, Brunella & Garcia-Appendini, Emilia & Nocera, Giacomo, 2016. "Experience and Brokerage in Asset Markets: Evidence from Art Auctions," Working Papers on Finance 1605, University of St. Gallen, School of Finance.
    4. Ventura Charlin & Arturo Cifuentes, 2013. "A new financial metric for the art market," Papers 1309.6929, arXiv.org, revised Jul 2015.
    5. repec:spr:etbull:v:1:y:2013:i:1:d:10.1007_s40505-013-0008-2 is not listed on IDEAS

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    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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