In this paper we investigate what drives the prices of Portuguese contemporary art at auction and explore the potential of art as an asset. Based on a hedonic prices model we construct an Art Price Index as a proxy for the Portuguese contemporary art market over the period of 1994 to 2014. A performance analysis suggests that art underperforms the S&P500 but overperforms the Portuguese stock market and American Government bonds. However, It does it at the cost of higher risk. Results also show that art as low correlation with financial markets, evidencing some potential in risk mitigation when added to traditional equity portfolios. ; NSBE - UNL
This paper provides a simple and empirically plausible model of artworks as investment vehicles. It reconciles the observation that average financial returns for collectibles are low and volatile with the theory of consumption-based asset pricing. Art assets are appealing both for their ability to transfer consumption over time and for their use as signals of wealth, as in the literature on the demand for luxuries. Adding art value to utility, returns also reflect this "conspicuous consumption" dividend; as a result, average financial returns are low. Risk premia for artworks are predicted to be modest or even negative. (JEL G11, Z11)
Purpose The purpose of this paper is to present the formulation of the first exhaustive price index for Argentinian (and other Latin American countries) visual artists using 5,069 works sold in auctions by 71 Argentinian artists during the years 1980-2014.
Design/methodology/approach The authors estimated a regression of hedonic prices using the ordinary least squares method. When the regression was run and the results were analysed, the authors then estimated the annual price index of Argentinian artists' work to then compare them with different financial and economic variables.
Findings The average annual nominal arithmetic rate of return in dollars for Argentinian art during this period was 6.81 per cent, with a 29.11 per cent standard deviation. Argentinian art shows a low correlation with Argentinian and US companies' shares and a slightly negative correlation with US bonds. This is the reason for artworks to be included in investors' portfolios despite the relatively high volatility.
Research limitations/implications Valuating works of art in Argentina can be explained by a series of their attributes. The benefits of art as an investment should be contrasted with factors including illiquidity and high transaction costs that are inherent when investing in works of art.
Practical implications Argentinian artists' works have higher prices when, ceteris paribus, they are dated; they are auctioned in either Christie's, Sotheby's, Galería Arroyo, Roldan & Cia, Meeting Art, or Naon & Cia; they are oil or acrylic paintings; they are larger in size – although the price increase is decreasing when the size of the painting increases; and when the artist dies before their work is auctioned.
Originality/value This work presents the first rigorous price index of Argentinian artists' works. Additionally, and as far as the authors have been able to observe, the time-period in this article is the longest that has been used in studies on art as an investment in emerging markets.
International audience ; In March 1969, in an article for New York magazine, the art critic Barbara Rose developed what would remain for her, as well as for many subsequent authors, a major thesis in the interpretation of conceptual art. By dematerializing art, she claimed, conceptual artists were formulating an unprecedented critique of the art market and the economic system in general. Indeed, who would pay for a sheet of paper with scribbles on it? Who would readily purchase an idea that can be appropriated just by reading it? "Artists today," she wrote, "are virtually fleeing the art world and the political economy on which it rests." 1
International audience ; In March 1969, in an article for New York magazine, the art critic Barbara Rose developed what would remain for her, as well as for many subsequent authors, a major thesis in the interpretation of conceptual art. By dematerializing art, she claimed, conceptual artists were formulating an unprecedented critique of the art market and the economic system in general. Indeed, who would pay for a sheet of paper with scribbles on it? Who would readily purchase an idea that can be appropriated just by reading it? "Artists today," she wrote, "are virtually fleeing the art world and the political economy on which it rests." 1
The financial underperformance of art as an investment is well documented. In contrast to studies conducted on peace-time periods, this paper shows that the art market in occupied France during WWII significantly outperformed all alternative investments (bonds, equities, as well as currencies exchanged on the black market) other than gold. This suggests that art may be a good hedge against low-probability disasters. The paper further demonstrates that motives to purchase art (consumption and investment) vary over time. In his theoretical model, Mandel (2009) attributes art's low return to the utility derived from conspicuous consumption. In occupied France during WWII, conspicuous consumption was impossible for artworks deemed "degenerate" by the Nazis. The price evolution of "degenerate" versus "non-degenerate" artworks confirms the importance of conspicuous consumption in artworks' pricing. Eventually, the paper defines the concept of discretion, the ability to store a large amount of value in small and easily transportable goods. During wartime, illegal activities and the risk of being forced to flee the country increased the interest for discreet assets as shown by the better performance of small (and thus discreet) artworks in comparison to large ones. ; info:eu-repo/semantics/published
"Bearing witness to the changing economic landscape amid the Cold War, artists in the 1960s created works that critiqued, reshaped, and sometimes reinforced the spirit of capitalism. At a time when currency and finance were becoming ever more abstracted-and the art market increasingly an arena for speculation-artists on both sides of the Atlantic turned to economic themes, often grounded in a human context. 'The Artist as Economist' examines artists who approached these issues in critical, imaginative, and humorous ways: Andy Warhol and Larry Rivers incorporated the iconography of printed currency into their paintings, while Ray Johnson sought to disrupt and reinvent circuits of commerce with his mail art collages. Yves Klein and Edward Kienholz critiqued conceptions of artistic and monetary value, as Lee Lozano and Dennis Oppenheim engaged directly with the New York Stock Exchange. Such examples, which author Sophie Cras insightfully situates within their historic economic context, reveal capitalism's visual dimension. As art and economics grow more entangled, this volume offers a timely consideration of art's capacity to reflect on and reimagine economic systems"--Publisher's description
The art market is concerned with the buying and selling of art. The price of art, unlike most other goods, is not set i.e. the price of art is dictated by a plethora of factors with individuals assigning varying values to a piece. Over the last few years, art has grown in popularity as an investment choice. This research paper aims to analyse the art market and further evaluate the unique characteristics of art, such as its low correlation, exclusivity and cultural richness, that make it different to other investment choices. The paper also extensively evaluates the determinants of returns on art investments. The aforementioned is supported by relevant theories and findings from existing literature.
Art today is defined by its relationship to money as never before. Prices have been driven to unprecedented heights, conventional boundaries within the art world have collapsed, and artists think ever more strategically about how to advance their careers. Art is no longer simply made, but packaged, sold, and branded. In Art of the Deal, Noah Horowitz exposes the inner workings of the contemporary art market, explaining how this unique economy came to be, how it works, and where it's headed.In a new postscript, Horowitz reflects on the evolution of the trade since the book's original release in 2011, shining light on the market's continued ascent as well as its most urgent challenges
Zugriffsoptionen:
Die folgenden Links führen aus den jeweiligen lokalen Bibliotheken zum Volltext:
publisher version ; Art has been suggested as a good way to diversify investment portfolios during times of financial uncertainty. The argument is that art exhibits different risk and return characteristics to conventional investments in other asset classes. The new Citadel Art Price index offered the opportunity to test this theory in the South African context. The Citadel index uses the hedonic regression method with observations drawn from the top 100, 50 and 20 artists by sales volume, giving approximately 29 503 total auction observations. The Index consists of quarterly data from the period 2000Q1 to 2013Q3. A VAR of the art price index, Johannesburg Stock Exchange all-share index, house price index, and South African government bond index were used. Flowing from the VAR results, additional analyses included variance decomposition, impulse response, and, to determine volatility, variance and standard deviation measures for each index. Results show that, when there are increased returns on the stock market in the previous period and wealth increases, there is a change in the Citadel Art Price Index in the same direction. This finding is consistent with Goetzmann et al. (2009), who reported that there is a strong relationship between art and equity markets and that art price changes are driven by capital gains and losses. No significant difference was found between the house price index and the art price index, and neither between the art and government bond price indices. Overall, the South African art market does not offer the opportunity to diversify portfolios dominated by either property, bonds, or shares.
