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Better off Dead? Prices Realised for Australian Paintings Sold at Auction

Author Info

Listed author(s):
  • Bronwyn Coate

    ()

    (School of Economics, Finance & Marketing, RMIT University, Melbourne, Victoria 3001, Australia)

  • Tim R.L. Fry

    ()

    (School of Economics, Finance & Marketing, RMIT University, Melbourne, Victoria 3001, Australia)

Abstract

Using auction sales data on Australian paintings over the period 1995 and 2003 we investigate the relationship between artists´ living status and the price of paintings sold at auction. For deceased artists we consider the time since their death and for living artists their conditional life expectancy. Hedonic regression analysis is applied separately to the data on Indigenous and non-Indigenous paintings. Comparing the modelling results across Indigenous and non-Indigenous paintings we see evidence of two different patterns of response to an artist´s living status. Both yield non-linear impacts but for Indigenous paintings these are quadratic and for non-Indigenous they are quartic. Thus the response to living status in the more recent market for Indigenous paintings is different to the more established market for non-Indigenous paintings. Whilst the responses differ for the two types of paintings, in answer to the question posed and in terms of the price of a painting at auction an artist is better off long dead or close to death.

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File URL: http://www.culturaleconomics.org/awp/AWP-02-2012.pdf
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Paper provided by Association for Cultural Economics International in its series ACEI Working Paper Series with number AWP-02-2012.

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Length: 28 pages
Date of creation: Feb 2012
Date of revision: Feb 2012
Handle: RePEc:cue:wpaper:awp-02-2012
Contact details of provider: Web page: http://www.culturaleconomics.org/
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More information through EDIRC

Keywords: Australian paintings; Indigenous paintings; auction prices; death; conditional life expectancy;

Find related papers by JEL classification:

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

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  1. Andrew Worthington & Helen Higgs, 2006. "A Note on Financial Risk, Return and Asset Pricing in Australian Modern and Contemporary Art," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 30(1), pages 73-84, March.
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  3. Victor Ginsburgh & Sheila Weyers, 2006. "Creativity and Life Cycles of Artists," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 30(2), pages 91-107, September.
  4. David Maddison & Anders Jul Pedersen, 2008. "The death effect in art prices: evidence from Denmark," Applied Economics, Taylor & Francis Journals, vol. 40(14), pages 1789-1793.
  5. Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-149, April.
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  7. Michael Hutter & Christian Knebel & Gunnar Pietzner & Maren Schäfer, 2007. "Two games in town: a comparison of dealer and auction prices in contemporary visual arts markets," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 31(4), pages 247-261, December.
  8. Victor Matheson & Robert Baade, 2004. "'Death effect' on collectible prices," Applied Economics, Taylor & Francis Journals, vol. 36(11), pages 1151-1155.
  9. Ginsburgh, Victor & Mei, Jianping & Moses, Michael, 2006. "The Computation of Prices Indices," Handbook of the Economics of Art and Culture, Elsevier.
  10. BAUWENS, Luc & GINSBURGH, Victor, "undated". "Art experts and auctions are pre-sale estimates unbiased and fully informative?," CORE Discussion Papers RP 1485, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. Richard Agnello & Renée Pierce, 1996. "Financial returns, price determinants, and genre effects in American art investment," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 20(4), pages 359-383, December.
  12. Jon Altman & Boyd Hunter, 2003. "Evaluating Indigenous Socioeconomic Outcomes In The Reconciliation Decade, 1991–2001," Economic Papers, The Economic Society of Australia, vol. 22(4), pages 1-15, December.
  13. Anderson, Robert C, 1974. "Paintings as an Investment," Economic Inquiry, Western Economic Association International, vol. 12(1), pages 13-26, March.
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  17. repec:adr:anecst:y:1994:i:35:p:06 is not listed on IDEAS
  18. Corinna Czujack, 1997. "Picasso Paintings at Auction, 1963–1994," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 21(3), pages 229-247, September.
  19. R. Ekelund & Rand Ressler & John Watson, 2000. "The ``Death-Effect'' in Art Prices: A Demand-Side Exploration," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 24(4), pages 283-300, November.
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Cited by:

  1. Ventura Charlin & Arturo Cifuentes, 2013. "A new financial metric for the art market," Papers 1309.6929, arXiv.org, revised Jul 2015.
  2. J. N. Lye and J. G. Hirschberg, 2012. "Inverse Test Confidence Intervals for Turning points: A," Department of Economics - Working Papers Series 1160, The University of Melbourne.

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