Emotional Assets

Abstract

Globally the number of high net worth individuals (HNWI) is increasing and their interest in investing into the luxury goods sector is increasing at a similar rate. In this paper we use a broad range of indices on a number of emotional assets, such as art, wine, stamps watches, and atlases, which make up more than 50% of HNWI's investment into the luxury good sector. Using the spanning techniques from de Roon et al. (2008) we analyze how the emotional assets add to the risk-return profile of both private and institutional investors. We find highly significant results for wine and books as a significant allocation into the emotional asset sector. Our findings substantiate the current allocation of HNWI in the luxury goods sector

Keywords: Philanthropy, Asset allocation, art, wine, luxary goods markets

JEL Classification: G11, Z10