2020/30 | LEM Working Paper Series | ||||||||||||||||
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Art Return Rates from Old Master Paintings to Contemporary Art |
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Federico Etro and Elena Stepanova |
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Keywords | |||||||||||||||||
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Art market; Mei-Moses index; Masterpiece effect; Contemporary art.
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C23, Z11
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Abstract | |||||||||||||||||
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We study return rates on art investment using a complete dataset on repeated sales for Old Master Paintings,
Modern art and Contemporary art auctioned worldwide at Christie's and Sotheby's from 2000 to 2018. We show
that return rates do not depend systematically on past prices or the place of sale, but we emphasize
substantial differences in returns across sectors. We also control for changes in transaction costs
(buyers' premiums and artists' resale rights), characteristics of the sale (evening sales, price
guarantees and past bought-ins) and news on the lots (changed attributions, public exhibitions or
death of the author) that appear reflected in art returns. We confirm the absence of masterpiece
effects in American, Chinese and Ethnic art. Finally, using historical data on prices during Renaissance,
Baroque and Neoclassical periods, we find evidence that price changes are independent from initial prices
also in the long run.
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