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The Returns to Picasso's Prints and to Traditional Financial Assets, 1977 to 1996

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  • James Pesando
  • Pauline Shum

Abstract

This paper updates prior work by Pesando (1993) regarding art as an investment. Using world-wide auction prices for Picasso prints for the period 1977 to 1996, this paper establishes that (1) a recovery in the art market did occur in the mid-1990s, but (2) the real rate of return on this segment of the art market remains low relative to its risk. Indeed, the real rate of return is beneath that provided by U.S. Treasury Bills. Copyright Kluwer Academic Publishers 1999

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  • James Pesando & Pauline Shum, 1999. "The Returns to Picasso's Prints and to Traditional Financial Assets, 1977 to 1996," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 23(3), pages 181-190, August.
    • Handle: RePEc:kap:jculte:v:23:y:1999:i:3:p:181-190
    DOI: 10.1023/A:1007595305661
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    Cited by:

    1. Kim Oosterlinck, 2017. "Art as a Wartime Investment: Conspicuous Consumption and Discretion," Economic Journal, Royal Economic Society, vol. 127(607), pages 2665-2701, December.
    2. Kim Oosterlinck, 2009. "The Price of Degenerate Art," Working Papers CEB 09-031.RS, ULB -- Universite Libre de Bruxelles.
    3. Kompa Krzysztof & Witkowska Dorota, 2014. "Construction Of Hedonic Price Index For The “Most Liquid” Polish Painters," Folia Oeconomica Stetinensia, Sciendo, vol. 14(2), pages 76-100, December.
    4. Luc Renneboog & Christophe Spaenjers, 2013. "Buying Beauty: On Prices and Returns in the Art Market," Management Science, INFORMS, vol. 59(1), pages 36-53, February.
    5. Abderazak Bakhouche & Ludovic P.J. Thebault, 2011. "What Determines Cézanne’S Art Pricing? A Hedonic Regression Method," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 58, pages 515-532, november.
    6. Le Fur, Eric, 2020. "Dynamics of the global fine art market prices," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 167-180.
    7. Louis Lévy-Garboua & Claude Montmarquette, 2011. "Demand," Chapters, in: Ruth Towse (ed.), A Handbook of Cultural Economics, Second Edition, chapter 26, Edward Elgar Publishing.
    8. Douglas J. Hodgson & Keith P. Vorkink, 2004. "Asset pricing theory and the valuation of Canadian paintings," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(3), pages 629-655, August.
    9. James E. Pesando & Pauline M. Shum, 2008. "The Auction Market For Modern Prints: Confirmations, Contradictions, And New Puzzles," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 149-159, April.
    10. Guido Candela & Paolo Figini & Antonello Scorcu, 2004. "Price Indices for Artists – A Proposal," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 28(4), pages 285-302, November.
    11. Marinelli, Nicoletta & Palomba, Giulio, 2011. "A model for pricing Italian Contemporary Art paintings at auction," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(2), pages 212-224, May.
    12. Váradi, Kata & Teszárik, Eszter, 2020. "A magyar festménypiac pénzügyi szemmel [The Hungarian market for paintings, from a financial point of view]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1271-1298.
    13. Francesco Angelini & Massimiliano Castellani, 2019. "Cultural and economic value: a critical review," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(2), pages 173-188, June.
    14. Victor Ginsburgh & Jianping Mei & Michael Moses, 2006. "On the computation of art indices in art," ULB Institutional Repository 2013/7290, ULB -- Universite Libre de Bruxelles.
    15. McQuillan, William & Lucey, Brian, 2016. "The validity of Islamic art as an investment," Research in International Business and Finance, Elsevier, vol. 36(C), pages 388-401.
    16. Lan Ju & Zhiyong Tu & Changyong Xue, 2019. "Art Pricing with Computer Graphic Techniques," Papers 1910.03800, arXiv.org.
    17. E. Chuke Nwude & Kenneth Chikezie Anyalechi, 2018. "Impact of Capital Structure on Performance of Commercial Banks in Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 298-303.
    18. Fur, Eric Le, 2021. "Fine Wines in a Diversified Portfolio of Collectibles," 2021 Conference, August 17-31, 2021, Virtual 315852, International Association of Agricultural Economists.
    19. Helen Higgs & Andrew Worthington, 2005. "Financial Returns and Price Determinants in the Australian Art Market, 1973–2003," The Economic Record, The Economic Society of Australia, vol. 81(253), pages 113-123, June.
    20. Petrov, Nikita & Ratnikova, Tatiana, 2017. "The price index for the paintings of Henri Matisse: The sensitivity to the method of construction and connection with stock market and art indices," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 47, pages 49-73.
    21. Helen Higgs, 2010. "Australian Art Market Prices during the Global Financial Crisis and two earlier decades," Discussion Papers in Economics economics:201003, Griffith University, Department of Accounting, Finance and Economics.
    22. Helen Higgs & John Forster, 2014. "The auction market for artworks and their physical dimensions: Australia—1986 to 2009," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(1), pages 85-104, February.
    23. Pownall, Rachel A.J. & Graddy, Kathryn, 2016. "Pricing color intensity and lightness in contemporary art auctions," Research in Economics, Elsevier, vol. 70(3), pages 412-420.
    24. 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.

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