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Determinants of art prices and performance by movements: Long-run evidence from an emerging market

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  • Garay, Urbi

Abstract

Art has become an increasingly important asset in the portfolios of investors. However, the literature on the investment attributes of art from emerging markets is limited. We address this gap by analyzing 5961 artworks executed by 69 Venezuelan artists and sold at auctions worldwide between 1969 and 2014, the longest art returns period ever assembled for an emerging market, estimating a hedonic price regression. Geometric mean nominal annual returns were 4.3%, slightly above inflation. Ceteris-paribus, artist reputation explains art prices, the most expensive artworks are sold at Sotheby's and Christie's, are dated and executed in oil, and correspond to the following topics: Abstract, self-portraits, objects, still life, urban and landscape. Venezuelan art exhibits low correlation with Venezuelan and U.S. stocks and bonds. We find, contrary to most of the literature, a strong “masterpiece effect” for Venezuelan art, and also that abstract artworks outperformed portfolios of figurative and landscape paintings.

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  • Garay, Urbi, 2021. "Determinants of art prices and performance by movements: Long-run evidence from an emerging market," Journal of Business Research, Elsevier, vol. 127(C), pages 413-426.
    • Handle: RePEc:eee:jbrese:v:127:y:2021:i:c:p:413-426
    DOI: 10.1016/j.jbusres.2019.03.057
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    Cited by:

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    2. Garay, Urbi & Pérez, Eduardo & Pulga, Fredy, 2022. "Color intensity variations and art prices: An examination of Latin American art," Journal of Business Research, Elsevier, vol. 147(C), pages 158-176.
    3. Shailendra Gurjar & Usha Ananthakumar, 2023. "The economics of art: price determinants and returns on investment in Indian paintings," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 50(6), pages 839-859, January.
    4. Wang, Fang, 2023. "Do emerging art market segments have their own price dynamics? Evidence from the Chinese art market," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 318-331.
    5. Kim Oosterlinck & Anne-Sophie Radermecker & Yuqing Song, 2023. "The Valuation of Copies for Chinese Artworks," Working Papers CEB 23-008, ULB -- Universite Libre de Bruxelles.
    6. Lin, Min-Bin & Wang, Bingling & Bocart, Fabian Y.R.P. & Hafner, Christian M. & Härdle, Wolfgang K., 2022. "DAI Digital Art Index : a robust price index for heterogeneous digital assets," LIDAM Discussion Papers ISBA 2022036, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).

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