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Art and the Economy: A First Look at the Market for Paintings in Turkey

Author

Listed:
  • Erdal Atukeren

    (ETH Zurich, KOF - Swiss Institute for Business Cycle Research)

  • Aylin Seçkin

    (Istanbul Bilgi University)

Abstract

We investigate the relationships between the return on investments in paintings and other financial investments in Turkey. To this aim, we estimate a hedonic price index for a portfolio of Turkish painters. We find that investing in the market for paintings is a viable alternative even in an environment of high inflation and large macroeconomic volatility. The portfolio under investigation yielded a small but positive real return. Still, stock market returns are higher than the returns in the art market. Furthermore, we find a rather high correlation between stock returns and art market returns. However, the returns to investing in paintings are negatively correlated with the returns on traditional investment alternatives in a developing country context, such as foreign exchange, gold, and bank deposits. Hence, there might exist some room for portfolio diversification. Nevertheless, the time horizon of the investments is a key factor especially in portfolios involving art objects.

Suggested Citation

  • Erdal Atukeren & Aylin Seçkin, 2006. "Art and the Economy: A First Look at the Market for Paintings in Turkey," Economics Bulletin, AccessEcon, vol. 26(3), pages 1-13.
    • Handle: RePEc:ebl:ecbull:eb-06z10130
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    References listed on IDEAS

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    Cited by:

    1. Bocart, Fabian Y.R.P. & Hafner, Christian M., 2012. "Econometric analysis of volatile art markets," Computational Statistics & Data Analysis, Elsevier, vol. 56(11), pages 3091-3104.
    2. Bocart, Fabian Y. R. P. & Hafner, Christian M., 2012. "Volatility of price indices for heterogeneous goods," SFB 649 Discussion Papers 2012-039, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    3. Douglas HODGSON & Aylin SECKIN, 2010. "Dynamic Price Dependence of Canadian and World Art Markets: An Empirical Analysis," EcoMod2010 259600074, EcoMod.
    4. Roman Kräussl, 2014. "Art as an Aternative Asset Class: Risk and Return Characteristics of the Middle Eastern & Northern African Art Markets," LSF Research Working Paper Series 14-10, Luxembourg School of Finance, University of Luxembourg.
    5. Seçkin Aylin & Atukeren Erdal, 2012. "A Heckit Model of Sales Dynamics in Turkish Art Auctions: 2005-2008," Review of Middle East Economics and Finance, De Gruyter, vol. 7(3), pages 1-32, May.
    6. Douglas Hodgson & Aylin Seçkin, 2012. "Dynamic price dependence of Canadian and international art markets: an empirical analysis," Empirical Economics, Springer, vol. 43(2), pages 867-890, October.
    7. Fedderke, Johannes W. & Li, Kaini, 2020. "Art in Africa: Hedonic price analysis of the South African fine art auction market, 2009–2014," Economic Modelling, Elsevier, vol. 84(C), pages 88-101.
    8. Binge, Laurie H. & Boshoff, Willem H., 2021. "Measuring alternative asset prices in an emerging market: The case of the South African art market," Emerging Markets Review, Elsevier, vol. 47(C).
    9. repec:hum:wpaper:sfb649dp2012-039 is not listed on IDEAS
    10. Belma Öztürkkal & Aslı Togan-Eğrican, 2020. "Art investment: hedging or safe haven through financial crises," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 44(3), pages 481-529, September.
    11. Demir, Ender & Gozgor, Giray & Sari, Emre, 2018. "Dynamics of the Turkish paintings market: A comprehensive empirical study," Emerging Markets Review, Elsevier, vol. 36(C), pages 180-194.

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    More about this item

    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics
    • G1 - Financial Economics - - General Financial Markets

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