In conditions of the stock market instability the art assets could be considered as an attractive investment. The fine art market is very heterogeneous which is featured by uniqueness of the goods, specific costs and risks, various peculiarities of functioning, different effects and, hence, needs special treatment. However, due to the diversity of the fine art market’s goods and the absence of the systematic information about the sales, researchers do not come to the same opinion about the merits of the art assets conducting studies on single segments of the market. We make an attempt to investigate attractiveness of the fine art market for investors. Extensive data was collected to obtain a complete pattern of the market analyzing it within different segments. We use the Heckman model in order to estimate the art asset return and find out the most influential factors of art price dynamics. Based on the estimates obtained we construct monthly art price index and compare it with S&P500 benchmark.
The instability of the stock market spurs investors to seek alternative ways of allocating financial resources. In this case, art assets could be considered as an attractive investment. Due to the uniqueness, specific costs, and risks inherent to the artworks, the fine art market is very heterogeneous and needs special treatment. In this article, we investigate attractiveness of the fine art market for investors in several ways. First, we construct hedonic art price indexes using the time dummy variable method based on the quantile regression. Secondly, we assess the art assets risk through CAPM model. Data include 536660 observations about oil paintings on auctions around the world during 2005-2015. According to the estimation results, the postwar paintings sold in the high price sector could be considered as an attractive sector for the investors but its acquisition is accompanied by a relatively high risk compared to the operation on the stock market. Index Terms-investment decisions, fine art market, hedonic art price index, fine art investment risk 1 https://www.theartnewspaper.com/news/global-auction-sales-up-25-in-2017 2 The percentage of unsold items.
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