2015/08 | LEM Working Paper Series | |
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Entry of Painters in the Amsterdam Market of the Golden Age |
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Federico Etro and Elena Stepanova |
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Keywords | ||
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Art market, Endogenous entry, Dutch Golden Age, Hedonic prices, VAR analysis
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JEL Classifications | ||
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Z11, N0, D4
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Abstract | ||
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We analyze the evolution of the price of paintings in the XVII century
Amsterdam art market to test a hypothesis of endogenous entry: higher
profitability should attract more entry of painters, which in turn
should lead to artistic innovations and more intense competition. We
build a price index for the representative painting inventoried in
Dutch houses through hedonic regressions controlling for
characteristics of the paintings (size, genre, placement in the
house), the owners (job, religion, value of the collection, size of
the house) and the painters. After a peak at the beginning of the
century, the real price of paintings decreases until the end of the
century: we provide anecdotal evidence for which high initial prices
attracted entry of innovators, and econometric evidence on the causal
relation between price movements and entry of painters. The time
series analysis supports the idea for which increasing prices
attracted entry of innovative painters.
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