Premium
THE AUCTION MARKET FOR MODERN PRINTS: CONFIRMATIONS, CONTRADICTIONS, AND NEW PUZZLES
Author(s) -
PESANDO JAMES E.,
SHUM PAULINE M.
Publication year - 2008
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2007.00070.x
Subject(s) - portfolio , economics , common value auction , financial economics , set (abstract data type) , microeconomics , computer science , programming language
Using a large data set with 80,214 repeat sales, we find that the real return on a diversified portfolio of modern prints sold at auctions worldwide averaged a modest 1.51% during the period 1977–2004. We address several issues regarding the performance of modern prints as investments: the selection bias arising from the self‐interest of auction houses; the impact of an ever‐expanding universe of auction houses on investment returns; the “masterpiece” effect, or whether more expensive works of art outperform the market as a whole; and the differences in returns that arise due to random fluctuations in collector tastes. ( JEL Z11, G11, G14)