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The Impact of Museum Purchase on the Auction Prices of Paintings

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  • Werner Pommerehne
  • Lars Feld

Abstract

This study examines how art museums‘purchasing policy influences the auction prices ofpaintings. Using a cross section of non-speculativetransactions during the period 1820–1970, we findconsiderable empirical support for the hypothesisthat public museums outside the U.S. pay above averageprices in auction markets providing higher thanaverage yields to private sellers. The typical U.S.private museums appear to be more restricted byfinancial constraints and the development of thegeneral economic conditions than their publiccounterparts. Copyright Kluwer Academic Publishers 1997

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  • 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, vol. 21(3), pages 249-271, September.
    • Handle: RePEc:kap:jculte:v:21:y:1997:i:3:p:249-271
    DOI: 10.1023/A:1007388024711
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    References listed on IDEAS

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    1. Goetzmann, William N, 1993. "Accounting for Taste: Art and the Financial Markets over Three Centuries," American Economic Review, American Economic Association, vol. 83(5), pages 1370-1376, December.
    2. Frey, Bruno S. & Eichenberger, Reiner, 1995. "On the rate of return in the art market: Survey and evaluation," European Economic Review, Elsevier, vol. 39(3-4), pages 528-537, April.
    3. Buelens, Nathalie & Ginsburgh, Victor, 1993. "Revisiting Baumol's 'art as floating crap game'," European Economic Review, Elsevier, vol. 37(7), pages 1351-1371, October.
    4. Ginsburgh, Victor & Jeanfils, Philippe, 1995. "Long-term comovements in international markets for paintings," European Economic Review, Elsevier, vol. 39(3-4), pages 538-548, April.
    5. Richard N. Rosett, 1991. "Art Museums in the United States: A Financial Portrait," NBER Chapters, in: The Economics of Art Museums, pages 129-178, National Bureau of Economic Research, Inc.
    6. Martin Feldstein, 1991. "The Economics of Art Museums," NBER Books, National Bureau of Economic Research, Inc, number feld91-1, March.
    7. Baumol, William J, 1986. "Unnatural Value: Or Art Investment as Floating Crap Game," American Economic Review, American Economic Association, vol. 76(2), pages 10-14, May.
    8. Chanel, Olivier, 1995. "Is art market behaviour predictable?," European Economic Review, Elsevier, vol. 39(3-4), pages 519-527, April.
    9. Stein, John Picard, 1977. "The Monetary Appreciation of Paintings," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 1021-1035, October.
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    Cited by:

    1. Michel Clement & Anke Lepthien & Tim Schulze, 2016. "Erfolgsfaktoren bei der Vermarktung von Kunst [Success Factors for Marketing of Arts]," Schmalenbach Journal of Business Research, Springer, vol. 68(4), pages 377-400, December.
    2. Olivier Chanel & Louis-André Gérard-Varet & Victor Ginsburgh, 1996. "The relevance of hedonic price indices," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 20(1), pages 1-24, March.
    3. Orley Ashenfelter & Kathryn Graddy, 2003. "Auctions and the Price of Art," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 763-787, September.
    4. Victor Ginsburgh & Jianping Mei & Michael Moses, 2006. "On the computation of art indices in art," ULB Institutional Repository 2013/7290, ULB -- Universite Libre de Bruxelles.
    5. 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.
    6. Calin Valsan & Robert Sproule, 2006. "Hedonic Models and Pre-Auction Estimates: Abstract Art Revisited," Economics Bulletin, AccessEcon, vol. 26(5), pages 1-10.
    7. Peter Johnson & Barry Thomas, 1998. "The Economics of Museums: A Research Perspective," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 22(2), pages 75-85, June.
    8. repec:ebl:ecbull:v:26:y:2006:i:3:p:1-13 is not listed on IDEAS
    9. Stahl, Sebastian, 2009. "Wertschöpfung in der zeitgenössischen Kunst: Zur „Young German Art“ [Value-Added Activities in the Contemporary Art: The Young German Art]," MPRA Paper 27983, University Library of Munich, Germany.
    10. Frey, Bruno S. & Meier, Stephan, 2006. "The Economics of Museums," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 29, pages 1017-1047, Elsevier.
    11. Merijn Rengers & Olav Velthuis, 2002. "Determinants of Prices for Contemporary Art in Dutch Galleries, 1992–1998," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 26(1), pages 1-28, February.
    12. Guadalajara, N & De La Poza, E., 2007. "The Influence Of The Net-metric And Biblio-metric Variables On The Top Artists Of The Internacional Art Market/La Influencia De Las Variables Red-metricas Y Biblio-metricas En El Mercado Del Arte De L," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 25, pages 5-22, Abril.
    13. Lisa Farrell & Tim R.L. Fry, 2017. "Pre-sale information and hammer prices for Australian Indigenous art," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(5), pages 483-500, November.
    14. Jennie Bai & Jia Guo & Benjamin R. Mandel, 2013. "Going global: markups and product quality in the Chinese art market," Staff Reports 614, Federal Reserve Bank of New York.
    15. Alexander Cuntz & Matthias Sahli, 2023. "Ars longa, vita brevis: The death of the creator and the impact on exhibitions and auction markets," WIPO Economic Research Working Papers 76, World Intellectual Property Organization - Economics and Statistics Division.
    16. Bruno Frey, 1997. "Art Markets and Economics: Introduction," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 21(3), pages 165-173, September.
    17. Aylin Seckin, 2006. "Art as an Investment under High Inflation: an Empirical Study on Turkish Paintings," EcoMod2006 272100081, EcoMod.
    18. repec:ebl:ecbull:v:26:y:2006:i:5:p:1-10 is not listed on IDEAS

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