Investing in Art: The Informational Content of Italian Painting Pre-Sale Estimates

27 Pages Posted: 4 Jan 2020

See all articles by Brunella Bruno

Brunella Bruno

Bocconi University - Department of Finance

Giacomo Nocera

Audencia Business School

Date Written: May 18, 2008


As the size of the art market increases and a growing number of investors are attracted by the high returns, the amount and quality of information available to market participants becomes increasingly relevant, especially for less experienced investors. One of the most relevant information sources in the art market is the price estimate provided by auction houses, that is the price that auctioneers believe a piece of art might bring at auction. Auction houses are regarded as providing additional valuable information to market participants. Thus pre-sale estimates could be useful reference points in the art valuation process, driving operators' investment and divestment decisions. However, as the price of each unique artwork is affected by inconstant and intangible factors, estimates are usually expressed as a range within which the experts forecast the final price will fall. The informational content of such estimates can be examined along two dimensions: the uncertainty and the accuracy of estimates in predicting sale prices. We test for any systematic differences in predicting hammer prices using a sample of 1,975 sales of Italian paintings which were sold all over the world at least twice during the 1985-2006 period. Three results emerge from the empirical evidence. First, pre-sale estimates are not good predictors of final sale prices. Second, uncertainty and accuracy in price prediction decreases and increases, respectively, when Italian paintings are auctioned in Italy, thus revealing a Country effect. Finally, the informational content of estimates is affected by past prices, thus revealing an anchoring effect.

Keywords: Art investment, Art prices, Pre-sale estimates, Anchoring, Italian paintings

JEL Classification: D44, G14, Z10

Suggested Citation

Bruno, Brunella and Nocera, Giacomo, Investing in Art: The Informational Content of Italian Painting Pre-Sale Estimates (May 18, 2008). Available at SSRN: or

Brunella Bruno

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136

Giacomo Nocera (Contact Author)

Audencia Business School ( email )

8 route de la Jonelière, BP 31222
Nantes Cedex 3, Cedex 3 44312

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