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Sample Selection Bias and Time Instability of Hedonic Art Price Indexes

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  • A. Collins
  • A. E. Scorcu
  • R. Zanola

Abstract

The uniqueness of art objects need to be taken into account in the construction of any art market price index. Yet the most widely used methods typically rely on biased samples, discarding a very large proportion of the information available (the repeated sales approach) and/or require strong assumptions regarding the structure and time stability of the market (the hedonic regression approach). In this paper a refined hedonic index is developed that explicitly addresses these problems. An empirical illustration comparing these methods is presented using a dataset of symbolist paintings appearing at auction over the period 1990-2001.

Suggested Citation

  • A. Collins & A. E. Scorcu & R. Zanola, 2007. "Sample Selection Bias and Time Instability of Hedonic Art Price Indexes," Working Papers 610, Dipartimento Scienze Economiche, Universita' di Bologna.
  • Handle: RePEc:bol:bodewp:610
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    References listed on IDEAS

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    1. Marilena Biey & Roberto Zanola, 2005. "The Market for Picasso Prints: A Hybrid Model Approach," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 29(2), pages 127-136, May.
    2. Ginsburgh, Victor & Mei, Jianping & Moses, Michael, 2006. "The Computation of Prices Indices," Handbook of the Economics of Art and Culture, Elsevier.
    3. Alan Beggs & Kathryn Graddy, 2008. "Failure to meet the reserve price: the impact on returns to art," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 32(4), pages 301-320, December.
    4. Eric Clapham & Peter Englund & John M. Quigley & Christian L. Redfearn, 2006. "Revisiting the Past and Settling the Score: Index Revision for House Price Derivatives," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 34(2), pages 275-302, June.
    5. Victor Ginsburgh & Pierre-Michel Menger, 1996. "Economics of the arts: selected essays," ULB Institutional Repository 2013/1655, ULB -- Universite Libre de Bruxelles.
    6. Chanel, O. & Gerard, L.A. & Ginsburgh, V., 1992. "The Relevence of Hedonic Price Indices the Case of Paintings," G.R.E.Q.A.M. 92a19, Universite Aix-Marseille III.
    7. Munneke, Henry J & Slade, Barrett A, 2000. "An Empirical Study of Sample-Selection Bias in Indices of Commercial Real Estate," The Journal of Real Estate Finance and Economics, Springer, vol. 21(1), pages 45-64, July.
    8. Bradford Case & Henry O. Pollakowski & Susan M. Wachter, 1991. "On Choosing Among House Price Index Methodologies," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 286-307.
    9. G. Candela & A. Scorcu, 1997. "A Price Index for Art Market Auctions," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 21(3), pages 175-196, September.
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    Cited by:

    1. Nicoletta Marinelli & Giulio Palomba, . "A Model for Pricing the Italian Contemporary Art Paintings at Auction," EHUCHAPS, Universidad del País Vasco - Facultad de Ciencias Económicas y Empresariales.
    2. Ventura Charlin & Arturo Cifuentes, 2013. "A new financial metric for the art market," Papers 1309.6929, arXiv.org, revised Jul 2015.
    3. Marinelli, Nicoletta & Palomba, Giulio, 2011. "A model for pricing Italian Contemporary Art paintings at auction," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(2), pages 212-224, May.

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