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Towards a Monotonicity-Compliant Price Index for the Art Market


  • Ventura Charlin
  • Arturo Cifuentes


Notwithstanding almost forty years of efforts, the market for paintings still lacks a widely accepted price index. In this paper, we introduce a simple and intuitive metric to construct such index. Our metric is based on the price of a painting divided by its area. This formulation rests on a solid mathematical foundation as it corresponds to a particular type of hedonic model. However, unlike indexes based on the time-dummy coefficients of conventional hedonic models, this index satisfies the monotonicity condition. We demonstrate with a simple example the advantages of our metric. We also show the dangers of relying on the time-dummy coefficients of conventional hedonic models to estimate returns and generate price indexes.

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  • Ventura Charlin & Arturo Cifuentes, 2014. "Towards a Monotonicity-Compliant Price Index for the Art Market," Papers 1404.5203,
  • Handle: RePEc:arx:papers:1404.5203

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    References listed on IDEAS

    1. Ginsburgh, Victor & Mei, Jianping & Moses, Michael, 2006. "The Computation of Prices Indices," Handbook of the Economics of Art and Culture, Elsevier.
    2. Eurostat, 2013. "Handbook on Residential Property Prices Indices," World Bank Publications, The World Bank, number 17280, May.
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