A new financial metric for the art market
This paper introduces a new financial metric for the art market. The metric, which we call Artistic Power Value (APV), is based on the price per unit of area (dollars per square centimeter) and is applicable to two-dimensional art objects such as paintings. In addition to its intuitive appeal and ease of computation, this metric has several advantages from the investor’s viewpoint. For example, it makes it easy to: (i) estimate price ranges for different artists; (ii) perform comparisons among them; (iii) follow the evolution of the artists’ creativity cycle overtime; and (iiii) compare, for a single artist, paintings with different subjects or different geometric properties. Additionally, the APV facilitates the process of estimating total returns. Finally, due to its transparency, the APV can be used to design derivatives-like instruments that can appeal to both, investors and speculators. Several examples validate this metric and demonstrate its usefulness.
|Date of creation:||23 Sep 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Anderson, Robert C, 1974. "Paintings as an Investment," Economic Inquiry, Western Economic Association International, vol. 12(1), pages 13-26, March.
- Chanel, O. & Gerard, L.A. & Ginsburgh, V., 1992.
"The Relevence of Hedonic Price Indices the Case of Paintings,"
92a19, Universite Aix-Marseille III.
- Olivier Chanel & Louis-André Gérard-Varlet & Victor Ginsburgh, 1996. "The relevance of hedonic price indices: the case of paintings," ULB Institutional Repository 2013/1715, ULB -- Universite Libre de Bruxelles.
- David W. Galenson & Bruce A. Weinberg, 2000.
"Age and the Quality of Work: The Case of Modern American Painters,"
Journal of Political Economy,
University of Chicago Press, vol. 108(4), pages 761-777, August.
- David W. Galenson & Bruce A. Weinberg, 1999. "Age and the Quality of Work: The Case of Modern American Painters," NBER Working Papers 7122, National Bureau of Economic Research, Inc.
- David W. Galenson, 1999. "The Lives of the Painters of Modern Life: The Careers of Artists in France from Impressionism to Cubism," NBER Working Papers 6888, National Bureau of Economic Research, Inc.
- Olivier Chanel & Louis-André Gérard-Varlet & Victor Ginsburgh, 1994.
"Prices and returns on paintings: an exercise on how to price the priceless,"
ULB Institutional Repository
2013/1721, ULB -- Universite Libre de Bruxelles.
- O. Chanel & L. A. Gerard-Varet & V. Ginsburgh, 1994. "Prices and Returns on Paintings: An Exercise on How to Price the Priceless," The Geneva Risk and Insurance Review, Palgrave Macmillan, vol. 19(1), pages 7-21, June.
- Chanel, O. & Gerard-Varet, L.A. & Ginsburgh, V., 1993. "Prices and Returns on Paintings and Exercise on How to Price the Priceless," G.R.E.Q.A.M. 93b01, Universite Aix-Marseille III.
- Chanel, O. & Gerard-Varet, L. A. & Ginsburgh, V., . "Prices and returns on paintings: an exercice on how to price the priceless," CORE Discussion Papers RP 1106, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Antonello E. Scorcu & Roberto Zanola, 2010. "The ‘Right’ Price for Art Collectibles. A Quantile Hedonic Regression Investigation of Picasso Paintings," Working Paper Series 01_10, The Rimini Centre for Economic Analysis.
- Galbraith, John W. & Hodgson, Douglas J., 2012.
"Dimension reduction and model averaging for estimation of artists' age-valuation profiles,"
European Economic Review,
Elsevier, vol. 56(3), pages 422-435.
- John Galbraith & Douglas James Hodgson, 2009. "Dimension Reduction and Model Averaging for Estimation of Artists' Age-Valuation Profiles," CIRANO Working Papers 2009s-41, CIRANO.
- Jianping Mei & Michael Moses, 2002. "Art as an Investment and the Underperformance of Masterpieces," American Economic Review, American Economic Association, vol. 92(5), pages 1656-1668, December.
- Andrew C. Worthington & Helen Higgs, 2004. "Art as an investment: risk, return and portfolio diversification in major painting markets," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 44(2), pages 257-271.
- Victor Ginsburgh & Sheila Weyers, 2006.
"Creativity and life cycles of artists,"
ULB Institutional Repository
2013/99270, ULB -- Universite Libre de Bruxelles.
- Helen Higgs & Andrew Worthington, 2005.
"Financial Returns and Price Determinants in the Australian Art Market, 1973-2003,"
The Economic Record,
The Economic Society of Australia, vol. 81(253), pages 113-123, 06.
- Helen Higgs & Andrew C Worthington, 2004. "Financial returns and price determinants in the Australian art market, 1973-2003," School of Economics and Finance Discussion Papers and Working Papers Series 184, School of Economics and Finance, Queensland University of Technology.
- Calin Valsan & Robert Sproule, 2006. "Hedonic Models and Pre-Auction Estimates: Abstract Art Revisited," Economics Bulletin, AccessEcon, vol. 26(5), pages 1-10.
- Renneboog, L.D.R. & Spaenjers, C., 2009.
"Buying Beauty : On Prices and Returns in the Art Market,"
2009-15, Tilburg University, Center for Economic Research.
- Luc Renneboog & Christophe Spaenjers, 2013. "Buying Beauty: On Prices and Returns in the Art Market," Management Science, INFORMS, vol. 59(1), pages 36-53, February.
- Christophe Spaenjers & Luc Renneboog, 2013. "Buying Beauty: On Prices and Returns in the Art Market," Post-Print hal-00784069, HAL.
- 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.
- Eurostat, 2013. "Handbook on Residential Property Prices Indices," World Bank Publications, The World Bank, number 17280.
- 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.
- Ginsburgh, Victor & Mei, Jianping & Moses, Michael, 2006. "The Computation of Prices Indices," Handbook of the Economics of Art and Culture, Elsevier.
- Richard Agnello & Renée Pierce, 1996. "Financial returns, price determinants, and genre effects in American art investment," Journal of Cultural Economics, Springer, vol. 20(4), pages 359-383, December.
- Bronwyn Coate & Tim R.L. Fry, 2012. "Better off Dead? Prices Realised for Australian Paintings Sold at Auction," ACEI Working Paper Series AWP-02-2012, Association for Cultural Economics International, revised Feb 2012.
- repec:ebl:ecbull:v:26:y:2006:i:5:p:1-10 is not listed on IDEAS
- Barbosa, Renata Leite & Campos, Nauro F, 2008.
"Paintings and Numbers: An Econometric Investigation of Sales Rates, Prices and Returns in Latin American Art Auctions,"
CEPR Discussion Papers
6806, C.E.P.R. Discussion Papers.
- Nauro F. Campos & Renata Leite Barbosa, 2009. "Paintings and numbers: an econometric investigation of sales rates, prices, and returns in Latin American art auctions," Oxford Economic Papers, Oxford University Press, vol. 61(1), pages 28-51, January.
- Campos, Nauro F & Leite Barbosa, Renata, 2008. "Paintings and Numbers: An Econometric Investigation of Sales Rates, Prices and Returns in Latin American Art Auctions," IZA Discussion Papers 3445, Institute for the Study of Labor (IZA).
- Pesando, James E, 1993. "Art as an Investment: The Market for Modern Prints," American Economic Review, American Economic Association, vol. 83(5), pages 1075-89, December.
- Luc Renneboog, 2002.
"The monetary appreciation of paintings: from realism to Magritte,"
Cambridge Journal of Economics,
Oxford University Press, vol. 26(3), pages 331-358, May.
- Renneboog, L.D.R. & van Houte, T., 1999. "The Monetary Appreciation of Paintings : From Realism to Magritte," Discussion Paper 1999-62, Tilburg University, Center for Economic Research.
- Brachinger, Hans Wolfgang, 2002. "Statistical Theory of Hedonic Price Indices," DQE Working Papers 1, Department of Quantitative Economics, University of Freiburg/Fribourg Switzerland, revised Aug 2003.
- 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 1370-76, December.
- David Galenson, 2000. "The Careers of Modern Artists," Journal of Cultural Economics, Springer, vol. 24(2), pages 87-112, May.
- R. Ekelund & Rand Ressler & John Watson, 2000. "The ``Death-Effect'' in Art Prices: A Demand-Side Exploration," Journal of Cultural Economics, Springer, vol. 24(4), pages 283-300, November.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:50186. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.