There's More Than Meets the Eye: Looking at Art as an Alternative Investment Público

Abstract

Abstract
There's More Than Meets the Eye: Looking at Art as an Alternative Investment
By Hannah Levenkron
This paper examines prices and returns of the paintings of the world's top 500 artists. I compared
this index to other financial assets, including the S&P 500 index, ten-year government bonds,
and three-month treasury bills. I use these comparisons to observe fine art as an alternative
investment over the period 1960 - 2010. Based on the art index, I found that art realizes an
annual return of 12%, the highest of all the financial assets. It also has a high standard deviation
and low Sharpe Ratio, which indicates that art is a very risky asset. My CAPM regression results
show that art has a market beta of .79 and it correlates positively with equities, having a
correlation coefficient of 13.9%. These results show that art is not an attractive alternative
investment to stocks. I also performed autoregression analysis and found that the art index leads
the S&P 500 index and the art market has recovered quicker from the recent financial crisis than
the equity market. These results show that art might be a good predictor of the future state of the
world's economy. However, despite its high returns, art has a lot of risk, which makes it an
unappealing investment.

Table of Contents

Table of Contents
1. Introduction

2. Background Literature

3. The Subjectivity of Art

4. Methdology

5. Results

6. Conclusion

Appendix

References

About this Honors Thesis

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• Permission granted by the author to include this thesis or dissertation in this repository. All rights reserved by the author. Please contact the author for information regarding the reproduction and use of this thesis or dissertation.

School	Emory College
Department	Economics
Degree	BA
Submission	Honors Thesis
Language	English
Research Field	Fine Arts Economics, Finance
Palavra-chave	Art Investment
Committee Chair / Thesis Advisor	Pesavento, Elena, Emory University
Committee Members	Mialon, Hugo M, Emory University Fletcher, Dorothy, Emory University

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