umu.sePublications
Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Essays on Art Markets: insight from the international sculpture auction market
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.ORCID iD: 0000-0002-5240-5283
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The main purpose of this thesis is to investigate the viability of sculpture as a potential alternative investment. This goal is achieved through partly assessing the market quality of the auction market for sculptures and partly by studying their long-run diversification potential. The assessment of the sculpture market quality, together with the long-run co-movement analysis are objectives met through conducting four individual studies.

In Paper I, I find that auction house art experts' relative estimate range positively affects realized prices. The effect is robust across the mid- low- and high-end segments of the international sculpture market. Interpreting the art experts' price estimate range as a proxy for the prevailing divergence of investor opinion in the art market, the findings are consistent with the disagreement model of Miller (1977). This evidence is contradictory to the predictions of the general auction model in Milgrom (1982) and does not lend support to the interpretation of the price estimate range as a proxy only for uncertainty. Moreover, the study gives insight into the price determinants of sculpture using a unique large dataset of over 65,000 sculpture sales at international auctions.

Paper II is the first study to find evidence of a home bias in prices of art sold at international art auctions. All else equal, art prices are higher when they are auctioned in the home country of the artist compared to outside of the artist's home country. Moreover, the home bias in prices is more pronounced in the low-end sculpture market segment than in the high-end segment, indicating that familiarity can be a potential explanation of the bias. Furthermore, the home bias is found to be partly related to patriotism. The findings indicate that the home bias in prices increases as the relative level of patriotism rises in the home country of the artist, and that patriotism is a more persistent source of the home bias in art prices than familiarity.

Paper III examines the absolute and time-varying weak-form market efficiency of the international sculpture auction market. The results indicate that the sculpture market efficiency varies over time lending support to the Adaptive Markets Hypothesis. Moreover, I find that the times of peaking relative market inefficiency coincide with distress in the wider economy and financial markets. Additionally, I find evidence that auction house art experts' pre-sale estimate accuracy Granger causes developments in time-varying market efficiency, highlighting the importance of art experts.

Paper IV analyzes the dynamic relationship between the international sculpture market and the traditional financial investments during the period 1985-2013. Three international sculpture price indices are constructed to proxy for the general sculpture market price movements along with the low- and high-end segments of the international sculpture market. The results show that price development in the sculpture market does not move together with government bond prices in the long run. When it comes to equity markets, I find significant cointegrated dynamics between sculpture indices and the world equity markets. On the other hand, there is no such relationship when the S&P 500 is considered. Furthermore, cointegration is detected when analyzing the sculpture markets with the world GDP per capita. Granger-causality tests reveal that sculpture prices, in general, are Granger-caused by GDP per capita. Moreover, the Granger-causality tests indicate that sculpture price developments follow the world equity price movements, but not those of the S&P 500.

Place, publisher, year, edition, pages
Umeå: Umeå Universitet , 2015. , 71 p.
Series
Studier i företagsekonomi. Serie B, ISSN 0346-8291 ; 88
Keyword [en]
Art markets, asset pricing, art finance, art economics, art auctions, sculpture market, art as alternative investment, art pricing
National Category
Business Administration
Research subject
Business Studies
Identifiers
URN: urn:nbn:se:umu:diva-106693ISBN: 978-91-7601-352-6 (print)OAI: oai:DiVA.org:umu-106693DiVA: diva2:865072
Public defence
2015-11-25, Samhällsvetarhuset, Hörsal C, Umeå Universitet, Umeå, 13:15 (English)
Opponent
Supervisors
Available from: 2015-11-04 Created: 2015-08-03 Last updated: 2015-10-29Bibliographically approved
List of papers
1. Uncertainty, Disagreement and Expert Price Estimates in Art Markets
Open this publication in new window or tab >>Uncertainty, Disagreement and Expert Price Estimates in Art Markets
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This study finds that auction house art experts' relative estimate range positively affects realized prices. The effect is robust across the mid- low- and high-end segments of the international sculpture market. Interpreting the art experts' price estimate range as a proxy for the prevailing divergence of investor opinion in the art market, the findings are consistent with the disagreement model of Miller (1977). This evidence is contradictory to the predictions of the general auction model in Milgrom (1982) and does not lend support to the interpretation of the price estimate range as a proxy only for uncertainty. Moreover, the study gives insight into the price determinants of sculpture using a unique large dataset of over 65,000 sculpture sales at international auctions.

Keyword
art market, alternative investments, heterogeneous expectations, art auctions, auction theory
National Category
Business Administration
Research subject
Economics; Business Studies
Identifiers
urn:nbn:se:umu:diva-106696 (URN)
Available from: 2015-08-03 Created: 2015-08-03 Last updated: 2015-10-28
2. Art auction prices: home bias, familiarity and patriotism
Open this publication in new window or tab >>Art auction prices: home bias, familiarity and patriotism
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This study is the first to find evidence of a home bias in prices of art, using a large and unique dataset of sculptures sold at international art auctions. All else equal, art prices are higher when they are auctioned in the home country of the artist compared to outside of the artist's home country. Moreover, the home bias in prices is more pronounced in the low-end sculpture market segment than in the high-end segment, indicating that familiarity can be a potential explanation of the bias. Moreover, the home bias is found to be partly related to patriotism. The findings indicate that the home bias in prices increases as the relative level of patriotism rises in the home country of the artist, and that patriotism is a more persistent source of the home bias in art prices than familiarity.

Keyword
art market, home bias, art auctions, familiarity, patriotism
National Category
Business Administration
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-106697 (URN)
Available from: 2015-08-03 Created: 2015-08-03 Last updated: 2015-10-28
3. Sculpture Market Efficiency and the Impact of Auction House Art Experts
Open this publication in new window or tab >>Sculpture Market Efficiency and the Impact of Auction House Art Experts
(English)Manuscript (preprint) (Other academic)
Abstract [en]

In this study I examine the absolute and time-varying weak-form market efficiency of the international sculpture auction market. The results indicate that the sculpture market efficiency varies over time lending support to the Adaptive Markets Hypothesis. Moreover, I find that the times of peaking relative market inefficiency coincide with distress in the wider economy and financial markets. Additionally, I find evidence that auction house art experts' pre-sale estimate accuracy Granger causes developments in time-varying market efficiency, highlighting the importance of art experts.

Keyword
art market, sculpture market, art auctions, art experts, Efficient Markets Hypothesis, Adaptive Markets Hypothesis, time-varying market efficiency
National Category
Business Administration
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-106698 (URN)
Available from: 2015-08-03 Created: 2015-08-03 Last updated: 2015-10-28
4. Sculpture as an alternative investment: an analysis of price dynamics between sculpture and equity and bond markets
Open this publication in new window or tab >>Sculpture as an alternative investment: an analysis of price dynamics between sculpture and equity and bond markets
2015 (English)In: The Journal of Alternative Investments, ISSN 1520-3255, E-ISSN 2168-8435, Vol. 17, no 4, 21-45 p., 021Article in journal (Refereed) Published
Abstract [en]

This article analyzes the dynamic relationship between the international sculpture market and the traditional financial investments during the 1985–2011 period. Three international sculpture price indexes are constructed using an ordinary least squares (OLS) hedonic pricing method as well as a quantile hedonic pricing method. Cointegration tests show that, price development in the sculpture market does not move together with either equity prices or government bond prices in the long run. Furthermore, cointegration is only detected when gross domestic product (GDP) per capita is considered. When the lower-end and upper-end sculpture market segments are looked at separately, the latter exhibits long-run interdependencies with the international painting market, while the former does not. Granger-causality tests reveal that sculpture prices, in general, are Granger-caused by GDP per capita. In the longrun, however, GDP per capita does not Granger-cause the upper-end segment. Moreover, the Granger-causality tests indicate that sculpture price developments neither follow nor are followed by equity price movements.

Place, publisher, year, edition, pages
New York, USA: Institutional Investor Journals Group, 2015
Keyword
Alternative investments, art market, sculpture, art price index
National Category
Business Administration
Identifiers
urn:nbn:se:umu:diva-94416 (URN)10.3905/jai.2015.17.4.021 (DOI)
Available from: 2014-10-08 Created: 2014-10-08 Last updated: 2017-12-05Bibliographically approved

Open Access in DiVA

Essays on Art Markets(420 kB)592 downloads
File information
File name FULLTEXT01.pdfFile size 420 kBChecksum SHA-512
4666e1afae6a253e4ffaf63e5f1418d7102211dc16a4c12cf4ce04dfaef7ef88419ca9aa2481cc527c04f3161f746ae2a2c8d733aefb9d444ff33e40b22f8d7f
Type fulltextMimetype application/pdf
Spikblad(162 kB)1 downloads
File information
File name SPIKBLAD01.pdfFile size 162 kBChecksum SHA-512
8bd7c6c98481ba42da7d0912b4cd0aebf8df6a8f97ebd294713bddc2ef1bcae24f016458e7a430ff10c60d57c27dd75a309b7992046e77e9ba69b1090896c809
Type spikbladMimetype application/pdf

Search in DiVA

By author/editor
Vosilov, Rustam
By organisation
Business Administration
Business Administration

Search outside of DiVA

GoogleGoogle Scholar
Total: 592 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

isbn
urn-nbn

Altmetric score

isbn
urn-nbn
Total: 375 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf