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On the uncertainty of art market returns

Author

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  • Charlin, Ventura
  • Cifuentes, Arturo

Abstract

We examine the returns based on auction data for two individual artists and two groups of artists. We employ a Hedonic Pricing Model correcting for the log-transformation bias followed by a wild bootstrap method. This approach allows us to specify confidence intervals for the return estimates. We find that the resulting confidence intervals are wide; therefore, relying solely on point estimates of returns to derive conclusions can be misleading. This situation calls into question the validity of previous research and also shows that the very concept of return in the context of art markets is quite elusive.

Suggested Citation

  • Charlin, Ventura & Cifuentes, Arturo, 2017. "On the uncertainty of art market returns," Finance Research Letters, Elsevier, vol. 21(C), pages 186-189.
    • Handle: RePEc:eee:finlet:v:21:y:2017:i:c:p:186-189
    DOI: 10.1016/j.frl.2016.12.005
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    References listed on IDEAS

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    8. Luc Renneboog & Christophe Spaenjers, 2013. "Buying Beauty: On Prices and Returns in the Art Market," Management Science, INFORMS, vol. 59(1), pages 36-53, February.
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    Cited by:

    1. Belma Öztürkkal & Aslı Togan-Eğrican, 2020. "Art investment: hedging or safe haven through financial crises," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 44(3), pages 481-529, September.

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    More about this item

    Keywords

    Art market returns; Hedonic models; Bootstrapping; Alternative investments;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

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