Art Auctions and Art Investment in the Golden Age of British Painting

We analyse the evolution of the price of paintings in London auctions with a unique data set of over 200,000 sales in the period 1780–1840. We build a price index for the representative painting through hedonic regressions controlling for the characteristics of auctions and paintings and for the artists’ fixed effects. The emergence of an efficient secondary art market was an important opportunity for portfolio diversification. Estimating a CAPM model for art investment suggests that British paintings could deliver a higher return compared to imported paintings and an attractive source of diversification relative to the contemporary stock market. This contributed to increase the demand for British art and, possibly, to promote the innovations of its Golden Age. While the representative painting of the British school was initially undervalued, new British painters reached foreign prices by the beginning of 1800s.     

A place for everything and everything in its place: New York's role in the art market

A crucial point in any sale is the choice of the market where to sell. This issue is much more important in the case of the artworks, where there is evidence that arbitrage does not necessarily equalise prices of comparable items across different cities of sale. Are these price differences due to the specific characteristics of items sold in different places or do they capture the idiosyncratic nature of the markets? In order to answer to this question, we apply the unconditional Recentered Influence Function (RIF) regression method to a sample of Picasso paintings sold worldwide during the period 2000-2019. Specifically, we compare percentile price differences between New York City, which is known for its status as a world art city and the Rest of World. Overall, results illustrate that the law of one price fails with Picasso's ‘blue chips’, his most expensive artworks. However, after the 2008-09 financial crisis the art market became more efficient and the idiosyncratic nature of New York's art market faded.     

Art in Africa: Hedonic price analysis of the South African fine art auction market, 2009–2014

Real asset markets are characterized by illiquidity and heterogeneous assets, presenting challenges to price estimators. Use of a new dataset of 7,553 auction fine art lots brought to market in South Africa, for 2009–14, allows us to examine the full sales hedonic price estimator over a wide set of characteristics. Results validate full sale hedonic pricing: Identities of artists, medium and genre, dating characteristics, and physical characteristics of artwork are significant. External validity of hedonic pricing is supported by out-of-sample price prediction for 40 individual artists. Auction house catalogue presentation of art work also proves correlated with realized auction prices. Art as an asset finds support: art prices move countercyclically with GDP and domestic equity markets, pro-cyclically with off-shore equity markets, implying a risk diversification role. JEL Codes: D1, L8. Keywords: hedonic price equation, art market, South Africa Word Count: 9467 (including all Tables, Figures, References).     

Location matters: Estimating cluster premiums for prominent modern artists

This paper shows that ‘location matters’ in terms of premiums on creative clusters and peak ages. The analysis is based on the 214 most prominent modern visual artists born 1850-1945 and the art clusters of Paris and New York. Auction records of the past 20 years are used to estimate the value of artworks over an artist's career. The overall cluster premium for paintings produced in Paris and New York is found to be 11% and 43%, respectively; paintings made in Paris during the First World War have a premium of 14% while those produced between 1946 and 1975 have a premium of 27%. New York offers premiums for paintings produced there for all periods after the First World War, peaking at 74% between 1946 and 1975. When decomposing this premium, we find that quality rather than quantity of artists in the location is driving the results. It is argued that artists working in a cluster location reach a peak in the age-price profile of their work significantly earlier than artists working elsewhere.     

Does travel inspire? Evidence from the superstars of modern art

This paper investigates whether travel increases the value of paintings produced by modern visual artists. The analysis is based on the 214 most prominent modern visual artists born between 1850 and 1945 and auction records of their paintings over the past 20 years. We find that artworks produced in the year of a journey are 7% more valuable than paintings produced in periods with no travel. We attribute this effect to human capital investments, knowledge spillovers and inspiration from the travel destination itself. There are persistent, but declining benefits to travel over the subsequent 4 years. The analysis shows that the impact of travel is smaller for later periods as modern art becomes more abstract. The effect on the value of paintings differs depending on the purpose of a journey: work-related, recreational and politically motivated journeys have a positive contemporaneous effect on value, whereas educational journeys have a negative effect. In addition, we find that France, Germany and the United States are the most frequently visited destinations for modern artists and also yield considerable benefits during times of strong innovation.     

艺术品的金融属性：投资收益与资产配置*

本文基于2000—2014年中国艺术品拍卖市场近现代国画的微观数据,在资产配置中引入市场交易机制中的佣金变量,加入艺术品市场规模约束,采用重复交易法实证计量嵌入艺术品市场的投资收益特征并量化其资产配置效应,以测度其市场功能。优质的艺术精品具备金融资产风险和收益的基本特征,本文对艺术品资产与资本资产定价模型的适应性进行讨论。研究表明：在样本期内,剔除通胀和佣金成本因素后收益率更加贴近现实,中国艺术品投资的实际收益率水平为1308%,表现出高于欧美市场的投资溢价;艺术品投资与传统的股票、债券等金融资产之间表现出相对独立性,并能有效改善投资者资产组合的风险边界,可以成为资产配置优化和多样化的重要选择。中国艺术品市场的长期稳健发展将为投资者提供更多的资产优化产品和工具。     

Art as an investment: Short and long-term comovements in major painting markets

This paper examines the short and long-term price linkages among major art and equity markets over the period 1976–2001. The art markets examined are Contemporary Masters, French Impressionists, Modern European, 19^th Century European, Old Masters, Surrealists, 20^th Century English and Modern US paintings. A global equity index (with dividends and capitalisation changes) is also included. Multivariate cointegration procedures, Granger non-causality tests, level VAR and generalised variance decomposition analyses based on error-correction and vector autoregressive models are conducted to analyse short and long-run relationships among these markets. The results indicate that there is a stationary long-run relationship and significant short and long run causal linkages between the various painting markets and between the equity market and painting markets. However, in terms of the percentage of variance explained most painting markets are relatively isolated, and other painting markets are generally more important than the equity market in explaining the variance that is not caused by innovations in the market itself. This suggests that opportunities for portfolio diversification in art works alone and in conjunction with equity markets exist, though in common with the literature in this area the study finds that the returns on paintings are much lower and the risks much higher than in conventional financial markets.The authors would like to thank delegates to the 14th Australasian Finance and Banking Conference, University of New South Wales, seminar participants at the Queensland University of Technology and Massey University, Masaki Katsuura, and two anonymous referees for helpful comments on earlier versions of this paper. The financial assistance of a Queensland University of Technology, Faculty of Business Research Initiative Grant is also gratefully acknowledged.     

管理者交易的市场择时能力对市场有效性的影响

管理者卖出和买入公告对股票市场具有一定的影响,以管理者卖出交易和买入交易为公告样本进行实证分析,检验公告当日及给定事件期超额收益的显著性.结果显示:卖出公告样本反对半强式有效假说,管理人能够“卖高”,获得超额收益；而买入公告样本支持半强式有效假说,管理者不能够“买低”,在公告日和事件期都不能获得超额收益.     

论美术创作中的情感表达

好的绘画作品必须表达出作者的内心情感和深刻的思想内涵，是作者自身艺术修养和经历的浓缩写照。情感的表达是区别艺术和技巧的重要要素，影响艺术家情感的因素有许多，诸如艺术家的艺术天分、文化修养、个人经历以及艺术家所处的时代、地域等。艺术家个性化的情感对绘画题材、内容和形式有着深刻而直接的影响。同时，绘画中的情感表达也具有一定的局限性，绘画中的情感表达需要受到画家掌握的绘画技巧以及观众审美能力、个人喜好等条件的制约。     

Dynamic price dependence of Canadian and international art markets: an empirical analysis

Although the market for Canadian paintings is now of substantial magnitude, with several works having recently been sold for well over a million dollars, it remains true that with very few exceptions, the works of Canadian painters are bought and sold only in Canada and seem to be held only by Canadian collectors. This market can thus be viewed as largely local, and it is therefore not clear whether there should be any linkage between price movements for Canadian art and those for the mainstream international market in old master, impressionist, and modern art. This article investigates the presence and nature of such time series dependence econometrically, both in terms of long-term trends as reflected in the co-integrating relationship between Canadian and the international market, and in terms of short-run co-movements as represented in correlations. The possibility that the local market ??follows?? the international one is also considered through an analysis of Granger causality. For Canadian art prices, we use a new hedonic index that has been computed using an updated version of the dataset of Hodgson and Vorkink (Can J Econ 37:629?C655, 2004), while for the international prices, we use an index provided by Mei and Moses (Am Econ Rev 92:1656?C1668, 2002).     

Dimension reduction and model averaging for estimation of artists' age-valuation profiles

In hedonic regression models of the valuation of works of art, the age or period at which an artist produces a particular work is often found to have highly significant predictive value. Most existing results are based on regressions that pool many painters. Although the uniqueness of artists' career paths makes it interesting to estimate such regressions for individual artists, sample sizes are often inadequate for a model that would also include the large number of other relevant variables. We address this problem of inadequate degrees of freedom in individual artist regressions by using two statistical methods (model averaging and dimension reduction) to incorporate information from a potentially large number of predictor variables, despite relatively small samples. We find that individual age-valuation profiles can differ substantially from general pooled profiles, suggesting that methods that are more responsive to the unique features of individual artists may provide better predictions of art valuations at auction, and may be useful more generally in hedonic valuation problems.     

Financial Returns and Price Determinants in the Australian Art Market, 1973–2003*

In this study, 37 605 paintings by 60 well-known Australian artists sold at auction over the period 1973–2003 are used to construct a hedonic price index. The attributes included in the hedonic regression model include the name and living status of the artist, the size and medium of the painting and the auction house and year in which the painting was sold. The resulting index indicates that returns on Australian fine-art averaged 7 per cent over the period with a standard deviation of 16 per cent. The hedonic regression model also captures the willingness to pay for perceived attributes in the artwork, and this shows that works by McCubbin, Gascoigne, Thomas and Preston and other artists deceased at the time of auction, works executed in oils or acrylic, and those auctioned by Sotheby's or Christie's are associated with higher prices.     

Asymmetric Information and Adverse Selection in Mauritian Slave Auctions

Information asymmetry is a necessary prerequisite for testing adverse selection. This paper applies this sequence of tests to Mauritian slave auctions. The theory of dynamic auctions with private and common values suggests that when an informed participant is known to be active, uninformed bidders will be more aggressive and the selling price will be higher. We conjecture that observable family links between buyer and seller entailed superior information and find a strong price premium when a related buyer purchased a slave, indicative of information asymmetry. We then test for adverse selection using sale motivation. Our results indicate large discounts on voluntary as compared to involuntary sales. Consistent with adverse selection, the market anticipated that predominantly low-productivity slaves would be brought to the market in voluntary sales.     

The monetary appreciation of paintings: from realism to Magritte

This study investigates how investments in paintings comparewith those in stocks in terms of risk–return trade-offusing Sharpe and Treynor ratios and Markowitz efficient frontiers.A large database was analysed consisting of more than 10,500auction prices of Belgian paintings over the period 1970–97.These paintings are the auctioned oeuvre of 71 internationallyrecognised painters representing the main artistic schools (fromsocial realism to surrealism) over the period 1850–1950.Hedonic art returns are corrected for auction location and auctionhouse, artistic school, painters' reputation, medium, signatureand painting size. Surrealism and luminism have been the mostpopular currents of art (in monetary terms), while expressionismand symbolism have gained (financial) esteem. This study concludesthat art investments underperform equity market investmentsowing to the high risk of investing in art and its high transactioncosts, resale rights and insurance premia. In addition, theMarkowitz efficient frontier shows limited diversification potentialfor art.     

An Application of Hedonic Regression to Evaluate Prices of Polish Paintings

As the global financial crisis hit the world-wide stock markets, investors looked for alternative investments to diversify their portfolios. One of the more attractive alternate investment opportunities has been investment in art. However, in order to consider artworks as investment assets, the performance of the artworks must be evaluated in order to compare it to other financial instruments. Therefore, hedonic art price indexes are constructed for different art markets. The art market in Poland is characterized by a limited scale since it has only been developing since 1989. The aim of our research is evaluation of the hedonic art price indexes for Polish paintings. Hedonic regression models are estimated using data from auctions of paintings that took place in Poland in the years 2007–2010.     

Short sale constraints,disperse pessimistic beliefs and market efficiency — Evidence from the Chinese stock market

In the Chinese stock market, the regulatory agency lists qualified stocks on announcement date and permits investors to sell short on the effective date, a practice that allows us to directly study the impact of short sale constraints. Applying an event study to 511 additions, between February 2010 and August 2013, of individual stocks to the list of securities qualified for short sale, we find that short sale constraints cause individual stocks to be overpriced and that such overvaluation is exclusively related to distortions associated with pessimistic beliefs. In addition, we observe lower volatility, skewness and extreme value frequency of stock returns after short sale constraints are lifted. This implies the emergence of a more appropriate distribution of returns and improved market efficiency at the individual stock level as the range of securities qualified for short selling expands.     

“陌生化”理论在现代艺术作品中的应用

求新、求异、求奇、求变是"陌生化"理论的突出特征,"陌生化"不断更新人们感受世界的方法,让人摆脱感受上的惯常化并重新关注周围的世界。"陌生化"理论在现代艺术作品中被广泛应用,来自不同领域的现代艺术家们都在自觉或不自觉地把"陌生化"理论应用到自己的作品创作中,他们通过应用"陌生化"理论创作艺术作品来实现自己的审美追求。     

Sentiment and art prices

We hypothesize the existence of a slow-moving fad component in art prices. Using unique panel survey data on art market participants’ confidence levels in the outlook for a set of artists, we find that sentiment indeed predicts short-term returns.     

Pre‐sale information and hammer prices for Australian Indigenous art

Using sales data from 1987–2011 we investigate the role that pre‐sale price information plays in determining hammer prices for Australian Indigenous artworks. Importantly, we control for the degree of market concentration as this might influence buyers’ perceptions of fairness in relation to price estimates which are provided by auction houses. Auction houses therefore act as important intermediaries between art sellers and art buyers. The results suggest that pre‐sale estimates and market concentration have a differential impact on hammer prices, depending on the point in the conditional realised price distribution under examination.