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The Price of Degenerate Art

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  • Kim Oosterlinck

Abstract

This paper analyzes, on basis of an original database of close to 3 000 canvasses sold during the war in Drouot, the main French auction house, the evolution of the art market in occupied France. Based on hedonic regressions, it shows that by all standards the market experienced a massive boom. Our index increases from a value of 100 in December 1940 to more than 500 in February 1943 after which a marked decline occurred up till November 1943. The paper also analyzes the impact on the market of a given state policy regarding acceptable taste. The paper shows that the price of the paintings viewed as “degenerate” by the Nazis mimicked those of the art market in general and this up till June 1944 when their price increases once more whereas the general index decreases slightly.

Suggested Citation

  • Kim Oosterlinck, 2009. "The Price of Degenerate Art," Working Papers CEB 09-031.RS, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:sol:wpaper:09-031
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    References listed on IDEAS

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    1. Frey, Bruno S. & Eichenberger, Reiner, 1995. "On the rate of return in the art market: Survey and evaluation," European Economic Review, Elsevier, vol. 39(3-4), pages 528-537, April.
    2. Corinna Czujack, 1997. "Picasso paintings at auction, 1963-1994," ULB Institutional Repository 2013/193273, ULB -- Universite Libre de Bruxelles.
    3. Ginsburgh, Victor & Mei, Jianping & Moses, Michael, 2006. "The Computation of Prices Indices," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 27, pages 947-979, Elsevier.
    4. 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.
    5. Baumol, William J, 1986. "Unnatural Value: Or Art Investment as Floating Crap Game," American Economic Review, American Economic Association, vol. 76(2), pages 10-14, May.
    6. Jianping Mei & Michael Moses, 2002. "Art as an Investment and the Underperformance of Masterpieces," American Economic Review, American Economic Association, vol. 92(5), pages 1656-1668, December.
    7. Victor Ginsburgh & David Throsby, 2006. "Handbook of the economics of art and culture," ULB Institutional Repository 2013/1673, ULB -- Universite Libre de Bruxelles.
    8. Elisabetta Lazzaro, 2006. "Assessing Quality in Cultural Goods: The Hedonic Value of Originality in Rembrandt's Prints," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 30(1), pages 15-40, March.
    9. 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.
    10. Goetzmann, William N, 1993. "Accounting for Taste: Art and the Financial Markets over Three Centuries," American Economic Review, American Economic Association, vol. 83(5), pages 1370-1376, December.
    11. Elisabetta Lazzaro, 2006. "Assessing quality in cultural goods: The hedonic value of originality in Rembrandt’s prints," ULB Institutional Repository 2013/149123, ULB -- Universite Libre de Bruxelles.
    12. Pesando, James E, 1993. "Art as an Investment: The Market for Modern Prints," American Economic Review, American Economic Association, vol. 83(5), pages 1075-1089, December.
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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. Geraldine David & Kim Oosterlinck, 2012. "War, Inflation, Monetary Reform and the Art Market," Working Papers 0012, European Historical Economics Society (EHES).
    3. David le Bris, 2018. "What is a market crash?," Economic History Review, Economic History Society, vol. 71(2), pages 480-505, May.
    4. Geraldine David & Kim Oosterlinck, 2011. "War, Inflation, Monetary Reforms and the Art Market .The Belgian Art market (1944 – 1951)," Working Papers CEB 11-055, ULB -- Universite Libre de Bruxelles.
    5. Geraldine David, 2014. "Is Art Really a Safe Haven? Evidence from the French Art Market During WWI," Working Papers CEB 14-025, ULB -- Universite Libre de Bruxelles.

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    More about this item

    Keywords

    Art market; Art investments; Degenerate art; Economics of occupation; Hedonic Regression; World War Two;
    All these keywords.

    JEL classification:

    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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