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Art as an Aternative Asset Class: Risk and Return Characteristics of the Middle Eastern & Northern African Art Markets

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  • Roman Kräussl

    (LSF)

Abstract

This chapter analyzes the risk and return characteristics of investments in artists from the Middle East and Northern Africa (MENA) region over the sample period 2000 to 2012. With hedonic regression modeling we create an annual index that is based on 3,544 paintings created by 663 MENA artists. Our empirical results prove that investing in such a hypothetical index provides strong financial returns. While the results show an exponential growth in sales since 2006, the geometric annual return of the MENA art index is a stable13.9 percent over the whole period. We conclude that investing in MENA paintings would have been profitable but also note that we examined the performance of an emerging art market that has only seen an upward trend without any correction, yet.

Suggested Citation

  • Roman Kräussl, 2014. "Art as an Aternative Asset Class: Risk and Return Characteristics of the Middle Eastern & Northern African Art Markets," LSF Research Working Paper Series 14-10, Luxembourg School of Finance, University of Luxembourg.
    • Handle: RePEc:crf:wpaper:14-10
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    File URL: http://wwwen.uni.lu/content/download/71966/908300/file/Art%20as%20an%20Alternative%20Asset%20Class_Risk%20and%20Return%20Characteristics%20of%20the%20Middle%20Eastern%20and%20Northern%20African%20Art%20Markets_Kr%C3%A4ussl_June%202014.pdf
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    Cited by:

    1. Masset, Philippe & Weisskopf, Jean-Philippe & Faye, Benoît & Le Fur, Eric, 2016. "Red obsession: The ascent of fine wine in China," Emerging Markets Review, Elsevier, vol. 29(C), pages 200-225.

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    Keywords

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    JEL classification:

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

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