Long- and Short-Term Portfolio Choices of Paintings

Authors: Flôres Jr. R.G.¹; Ginsburgh V.²; Jeanfils P.³

Source: Journal of Cultural Economics, Volume 23, Number 3, August 1999 , pp. 191-208(18)

Publisher: Springer

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Abstract:

In their paper on price comovements of paintings, Ginsburgh and Jeanfils show that in three important markets (London, Paris and New York), prices of well-known and lesser known painters ``move together'' (are cointegrated). They conclude that therefore, an investor may be indifferent between the two groups of painters. We show that this is not the case, since well-known painters are less risky, and that though returns may be comparable, the share of well-known painters in a portfolio of paintings might be as high as 90%. We also construct long-run and short-run portfolios and show that these may be very different. These short-term portfolios give interesting insights which help in characterizing each of the three markets.

Keywords: investment in art; portfolio choices

Language: English

Document Type: Regular paper

Affiliations: 1: EPGE/FVG and Université Libre de Bruxelles 2: Université Libre de Bruxelles and CORE 3: Banque Nationale de Belgique

Publication date: 1999-08-01