Democracy and economic outcomes: Evidence from the superstars of modern art

This paper analyses the impact of the political environment on the value of artistic outcomes as measured by the price of paintings produced over the period from 1820 to 2007. The analysis is based on a unique dataset encompassing a global sample of 273 superstars of modern art born between 1800 and 1945, auction results of their paintings, and data on the political environment in the respective production countries. Controlling for a variety of economic and hedonic variables, there is a statistically significant, positive link between the level of democracy and the value of artistic output. Moreover, we find that democracy has a significant positive impact both on the density of superstar painters and the collective artistic human capital in a country.     

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.     

Asset pricing theory and the valuation of Canadian paintings

Abstract.  The valuation of Canadian paintings is analysed empirically. Using a sample of auction prices for major Canadian painters for the period 1968–2001, we run hedonic regressions to analyse the influence of various factors, including painter identity, on auction prices, as well as to construct a market price index. This index is used in a second‐stage analysis in which we analyse the properties of Canadian art viewed as an investment asset. We apply standard asset pricing theory, as incorporated in the capital asset pricing model (CAPM), to the analysis of price movements in the market for Canadian paintings.     

Australian Art Market Prices During the Global Financial Crisis and Two Earlier Decades

This study constructs a quarterly hedonic price index using 64,203 artworks, by seventy‐one well‐known modern and contemporary Australian artists, sold at auction houses over the period 1986–2009. The hedonic regression model includes characteristics such as name and living status of the artist, the size and medium of the painting, and the auction house, quarter and year in which the painting was sold. The resulting index indicates that returns on Australian fine‐art averaged one per cent in nominal terms over the period from quarter 1 1986 to quarter 4 2009 with a standard deviation of seventeen per cent. During the global financial crisis spanning quarter 1 2008 and quarter 4 2009, the average art returns declined in nominal terms by close to six per cent with a standard deviation of twenty‐one per cent. This study also shows that over the entire period the art market only marginally underperformed the stock and housing markets. The low correlations between these markets suggest the benefits of portfolio diversification.     

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。     

Economic Analysis Of The Droit De Suite– The Artist's Resale Royalty

Interest in the Droit de Suite, the artist's resale royalty, has been re-kindled by the decision of the European Union to introduce such a scheme to apply from 2006. The general nature of the Droit de Suite as an extension of copyright is discussed. The specific proposals for a Droit de Suite in Australia are analysed. Economic arguments support the sceptical view of the Droit de Suite. It is argued that the introduction of the Droit de Suite would be predicted to reduce sales of new paintings, that selling activity would move to jurisdictions which do not have a Droit de Suite and that artists would prefer to alienate their Droit de Suite by sale of a painting. The economic analysis is supplemented by an empirical study of art auction prices of 72 artists in Australia over the period 1973–1989 which reveals that the works few artists achieve a capital gain on sale in the secondary market re-inforcing the view that, if implemented, a Droit de Suite would provide payments to only a small number of artists who are likely to be in good economic circumstances. The burden of the Droit de Suite is shown to fall on the collector when selling paintings. The effect of the imposition of the Droit de Suite will be to lower the gain to collectors of paintings. It is concluded that the Australian proposal for the Droit de Suite is based on an inadequate analysis of the art market and would require a registration procedure for art works incurring heavy costs in relation to the funds available for distribution.     

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.     

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.     

Risky procurement with an insider bidder

Procurement auctions carry substantial risk when the value of the project is highly uncertain and known only to insiders. This paper reports the results from a series of experiments comparing the performance of three auction formats in such complex and risky settings. In the experiment, every bidder knows the private value for the project but only a single insider bidder knows the common-value part. In addition to the standard second-price and English auctions we test the “qualifying auction,” a two-stage format commonly used in the sale of complex and risky assets. The qualifying auction has a fully “revealing” equilibrium that implements the revenue-maximizing outcome but it also has an uninformative “babbling” equilibrium in which bidders place arbitrarily high bids in the first stage. In the experiments, the latter equilibrium has more drawing power, which causes the qualifying auction to perform worse than the English auction and only slightly better than a sealed-bid second-price auction. Compared to the two other formats, the English auction is roughly 40% more efficient, yields 50% more revenues, avoids windfall profits for the insider, while protecting uninformed bidders from losses.     

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.     

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.     

Multinational experience and the creation of linkages with local firms: evidence from the electronics industry

This paper focuses on multinational companies' creation of linkageswith local firms in the electronics industry. Evidence is drawnfrom a novel data-set, covering international operations ofthe top European and US electronics companies, over the period1984–95. Econometric tests are provided to highlight howfirms' multinational experience, measured by the extent of theirpresence in foreign countries, affects cooperative agreements,as opposed to licensing and foreign direct investments. It ishighlighted that multinationals' subsidiary accumulation hasa positive and significant impact on collaborative linkageswith local firms. This contrasts with the transaction cost viewunderlying most market-entry literature, but is consistent witha dynamic efficiency perspective which emphasises the role oflinkages in learning and knowledge accumulation and exploitation.     

An ascending double auction

We show why the failure of the affiliation assumption prevents the double auction from achieving efficient outcomes when values are interdependent. This motivates the study of an ascending price version of the double auction. It is shown that when there is a sufficiently large, but still finite, number of sellers, this mechanism has an approximate perfect Bayesian equilibrium in which traders continue bidding if and only if their true estimates of the ‘value’ of the object being traded exceed the current price. This equilibrium is ex post efficient and has a rational expectations property in the sense that along the equilibrium path traders appear to have made the best possible trades conditional on information revealed by the trading process. We thank two anonymous referees and Dan Kovenock, the Editor, whose detailed comments and suggestions have allowed us to substantially improve the paper. We also thank seminar participants at University of Toronto, University of Wisconsin-Madison, Summer 2003 North American Meetings of the Econometric Society, 2004 NSF Decentralization Conference for their comments.     

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.     

An experimental investigation of soft price caps in uniform price auction markets for wholesale electricity

This paper presents the results from an auction experiment using industry professionals and student participants who compete in a simulated wholesale market for electricity. Motivated by the intervention by FERC in response to the “meltdown” of the California spot market, we investigate the effect of including a “soft” price cap in a uniform price auction as a means of mitigating high prices. When prices are driven above the soft cap, offer curves become flat, in contrast to the hockey stick shape observed in a typical uniform price auction for electricity. This flat offer curve leads to market prices that are relatively insensitive to both generation costs and demand reductions.      

探析明清时期的闺阁绘画

作为一个女性绘画的潮流,明清闺阁绘画群体性特征在我国历史中绝无仅有,对于我们重新解读中国古代绘画史具有不可或缺的价值。文章从明清时期的闺阁画家入手,探析明清闺阁绘画产生的原因、风格和艺术特点,讨论这些女性绘画之于中国绘画史及女性艺术史的价值与局限性。     

R&;D and productivity: testing sectoral peculiarities using micro data

The aim of this study is to investigate the relationship between a firm’s R&D activities and its productivity using a unique micro data panel dataset and looking at sectoral peculiarities which may emerge; more specifically, we used an unbalanced longitudinal database consisting of 532 top European R&D investors over the 6-year period 2000–2005. Our main findings can be summarised along the following lines: knowledge stock has a significant positive impact on a firm’s productivity, with an overall elasticity of about 0.104; this general result is largely consistent with previous literature in terms of the sign, the significance and the estimated magnitude of the relevant coefficient. More interestingly, the coefficient increases monotonically when we move from the low-tech to the medium-high and high-tech sectors, ranging from a minimum of 0.03/0.05 to a maximum of 0.14/0.17. This outcome suggests that firms in high-tech sectors are still far ahead in terms of the impact on productivity of their R&D investments, at least as regards top European R&D investors.     

Assessing the performance of the UK Emissions Trading Scheme

The UK’s Climate Change Programme introduced an Emissions Trading Scheme (ETS) for greenhouse gases. Firms in over 40 industrial sectors which have negotiated “Climate Change Agreements” setting quantitative energy efficiency targets can use the ETS to trade over-and under-compliance with these targets. In parallel, a limited number of firms have become major participants in the ETS as a result of an auction of subsidies for additional abatement commitments. The paper describes the UK arrangements and assesses the economic efficiency and environmental effectiveness of the ETS, drawing on evidence of participants’ behaviour both in the incentive auction, and in subsequent trading.     

Innovation and economic performance in services: a firm-level analysis

This paper explores the two-way relationship between innovationand economic performance in services using a longitudinal firm-leveldataset which matches data from the second Community InnovationSurvey, CIS II (1993–95), against a set of economic variablesprovided by the System of Enterprise Accounts (1993–98).The results presented show that innovation is positively affectedby past economic performance and that innovation activities(especially investments in ICTs) have a positive impact on bothgrowth and productivity. Furthermore, productivity and innovationact as a self-reinforcing mechanism, which further boosts economicperformance. These findings provide empirical support for theendogenous nature of innovation in services and the presencein this sector of competition models and selection mechanismsbased on innovation.     

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。