What Matters in Art Investment? Öffentlichkeit
Gao, Yifei (Spring 2023)
Published
Abstract
Founded in previous research on building art indices to analyze the returns of art, this study draws from a dataset built from art pieces made by artists backed by 10 randomly chosen galleries in New York that participated in Art Basel in 2022 to build an annual index from 1886 to 2022. This analysis pushes the boundaries of past research studies in four main ways. One, it focuses on pieces made by artists backed by active New York galleries, giving us a glimpse of what returns could look like if we were to invest only in pieces suggested through a gallery. Two, this paper explores investment differences between three art types: paintings, prints, and sculptures. Three, this paper analyzes the possible link between consumer sentiment and returns. Four, this paper explores the potential relationships between starting price, holding time, and financial returns in an attempt to uncover a valid investment strategy. Consistent to earlier studies, I found that art returns are not as attractive as other potential assets, even if they are split in their respective art type categories. Contrary to earlier studies, volatility is higher across all art types despite the lower correlation with other assets leaving the argument that art can be used as a tool of portfolio diversification as unsatisfactory. Lastly, hold time correlations with returns are low but statistically significant and there is no relationship discovered between consumer sentiment and returns as well as painting bidding price and returns.
Table of Contents
Contents
1 Introduction: The Value of Art
1.1 Art as a Financial Asset ............................. 4
1.2 Art as a Psychological Asset............................. 7
1.3 Study Details .............................9
Data Extraction and Relevance .............................11
2 Methodology
3 Results & Discussion
3.1 Analyzing Returns Between Indices ..............................18
3.2 Correlations Between Indices............................. 21
3.3 Holding Times and Initial Prices.............................23
4 Conclusion
List of Tables
1 Summary Statistics of Art Pieces .............................12
2 Means and Standard Deviations of Returns Over 1986 - 2022 .............................19
3 Correlations of Real Returns Over 1986-2022 .............................21
4 Correlation between Hold-time and Real Returns Over 1986 - 2022.............................23
5 Correlation between Initial Selling Price and Real Returns Over 1986 - 2022.............................25
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What Matters in Art Investment? () | 2023-04-09 22:17:25 -0400 |
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