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Investment Returns and Risk for Art: Evidence from Auctions of American Paintings

Author

Listed:
  • Richard J. Agnello

    (Department of Economics, University of Delaware)

Abstract

The literature on return and risk for investment in paintings is extended by disaggregating for artist, genre, and quality. A hedonic log price model generates yearly price indices and shadow values for painting characteristics using a large sample of U.S. artists sold at auction from 1971 to 1996. Overall returns to holding paintings are low, and have high annual variation although disparities are found across categories. High quality paintings show the highest returns, second only to equities, and are not offset by higher risk. Buying the highest quality superstar paintings seems to be the best overall investment strategy.

Suggested Citation

  • 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.
    • Handle: RePEc:eej:eeconj:v:28:y:2002:i:4:p:443-463
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume28/V28N4P443_463.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Art; Artist;

    JEL classification:

    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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