Hedonic Pricing on the Fine Art Market

Abstract

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.

Non-fungible Tokens as an Alternative Investment – Evidence from CryptoPunks

“…Even though there are some studies who support art as an alternative investment, the majority of the research suggests that art is not a good option as an alternative investment. The only time art outperforms the S&P 500 index, according to Zhukova et al [16], is during periods of negative returns, which seems to make them a safe haven asset in times of crisis.…”

“…Another remarkable observation is that the performance of CryptoPunks basically exploded during the global pandemic, despite a global recession. This might reflect that investments in art and cryptocurrency seem a safe haven in times of financial crises [18,16]. Logic thereby follows that diversifying portfolios with such assets limits risk during uncertain times.…”