Emerging Art Markets

25 Pages Posted: 26 Feb 2020

See all articles by Roman Kräussl

Roman Kräussl

Bayes Business School (formerly Cass); Hoover Institution, Stanford University

Robin Logher

VU University Amsterdam - Department of Finance

Date Written: December 15, 2008


This paper analyzes the performance and risk-return characteristics of three major emerging art markets: Russia, China, and India. According to three national art market indices, built by hedonic regressions based on auction sales prices, the geometric annual returns are 10.00%, 5.70%, and 42.20% for Russia (1985-2008), China (1990-2008), and India (2002-2008), respectively. The Russian art market exhibits positive correlations with most common financial assets and a positive market beta, whereas the Chinese art market demonstrates a negative correlation overall and a negative market beta, and the Indian art index reveals a negative market beta and varying correlation results. Portfolio optimization under a power utility framework suggests limited diversification potential, but with a downside beta of 0.43, investing in Chinese art offers hedging potential during financial market downswings. Investigating the linkages between art and the economy through co-integration and causality analyses proves that emerging art markets share a significant long-term relation with other financial market instruments, but the short-term relations are largely absent.

Keywords: Art market index, Art investments, Art finance, Alternative assets, Portfolio allocation

JEL Classification: G11, G14

Suggested Citation

Kraeussl, Roman and Logher, Robin, Emerging Art Markets (December 15, 2008). Emerging Markets Review, Vol. 11, No. 4, 2010, Available at SSRN: https://ssrn.com/abstract=1304856

Roman Kraeussl (Contact Author)

Bayes Business School (formerly Cass) ( email )

106 Bunhill Row
United Kingdom

Hoover Institution, Stanford University ( email )

Stanford, CA 94305
United States

Robin Logher

VU University Amsterdam - Department of Finance ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV

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