Art as an Aternative Asset Class: Risk and Return Characteristics of the Middle Eastern & Northern African Art Markets
27 Pages
Posted: 4 Nov 2014
Last revised: 22 Nov 2014
Luxembourg School of Finance; Emory University - Goizueta Business School
Date Written: November 2, 2014
Abstract
This chapter analyzes the risk and return characteristics of investments in artists from the Middle East and Northern Africa (MENA) region over the sample period 2000 to 2012. With hedonic regression modeling we create an annual index that is based on 3,544 paintings created by 663 MENA artists. Our empirical results prove that investing in such a hypothetical index provides strong financial returns. While the results show an exponential growth in sales since 2006, the geometric annual return of the MENA art index is a stable 13.9 percent over the whole period. We conclude that investing in MENA paintings would have been profitable but also note that we examined the performance of an emerging art market that has only seen an upward trend without any correction, yet.
Keywords: Alternative investments, Art price index, Optimal Asset Allocation
JEL Classification: G11, Z11
Suggested Citation:
Suggested Citation
Kräussl, Roman, Art as an Aternative Asset Class: Risk and Return Characteristics of the Middle Eastern & Northern African Art Markets (November 2, 2014). Available at SSRN: https://ssrn.com/abstract=2518131 or http://dx.doi.org/10.2139/ssrn.2518131
