Australian Art Market Prices During the Global Financial Crisis and Two Earlier Decades

21 Pages Posted: 6 Jan 2020

Multiple version iconThere are 2 versions of this paper

Date Written: December 2012

Abstract

This study constructs a quarterly hedonic price index using 64,203 artworks, by seventy‐one well‐known modern and contemporary Australian artists, sold at auction houses over the period 1986–2009. The hedonic regression model includes characteristics such as name and living status of the artist, the size and medium of the painting, and the auction house, quarter and year in which the painting was sold. The resulting index indicates that returns on Australian fine‐art averaged one per cent in nominal terms over the period from quarter 1 1986 to quarter 4 2009 with a standard deviation of seventeen per cent. During the global financial crisis spanning quarter 1 2008 and quarter 4 2009, the average art returns declined in nominal terms by close to six per cent with a standard deviation of twenty‐one per cent. This study also shows that over the entire period the art market only marginally underperformed the stock and housing markets. The low correlations between these markets suggest the benefits of portfolio diversification.

Suggested Citation

Higgs, Helen, Australian Art Market Prices During the Global Financial Crisis and Two Earlier Decades (December 2012). Australian Economic Papers, Vol. 51, Issue 4, pp. 189-209, 2012, Available at SSRN: https://ssrn.com/abstract=2181803 or http://dx.doi.org/10.1111/1467-8454.12001

Helen Higgs (Contact Author)

Griffith University ( email )

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Nathan, QLD 4111
Australia
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