Investment in Paintings: A Short-Run Price Index

Authors: Locatelli Biey M.¹; Zanola R.²

Source: Journal of Cultural Economics, Volume 23, Number 3, August 1999 , pp. 209-219(11)

Publisher: Springer

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Abstract:

This paper analyses the performance of a speculative investment in paintings during the period 1987–1995 by applying a modified repeat sales technique to a sample of 1446 repeat sales. Since this period is characterised by a boom and a non-boom sub-period, a price risk term is introduced to estimate influences that only affect a painting's value upon its sale, by isolating shocks that can cause realised returns to stray from expectations. The main finding is that from 1987 to 1991 an investment in paintigs performs well if compared with alternative forms of investment, such as U.S. stocks, U.S. 30 year government bonds and gold; by contrast, from 1992 to 1995 returns are lower, with the exception of 1993.

Keywords: auction; capital asset price index; painting; repeat sales; speculative investment

Language: English

Document Type: Regular paper

Affiliations: 1: University of Torino, Department of Economics, Italy 2: University of Piemonte Orientale ``Amedeo Avogadro'', POLIS, Italy

Publication date: 1999-08-01