Australian fine art as an alternative investment

Australian fine art as an alternative investment Purpose – The purpose of this paper is to examine the investment characteristics of works by leading Australian artists. Design/methodology/approach – About 35,805 paintings by 45 leading Australian artists sold at auction are used to construct individual hedonic price indices. The attributes included in each artist's hedonic regression model include the size and medium of the painting and the auction house and year sold. Findings – The indexes show that average annual returns across all artists range between 4 and 15 per cent with a mean of 8 per cent, with the highest returns for works by Brett Whiteley, Jeffrey Smart, Cecil Brack and Margaret Olley. Risk‐adjusted returns are generally lower, with reward‐to‐volatility and reward‐to‐variability ratios averaging 1.5 and 5.8 per cent, respectively. The portfolio β s for individual artistic works average 0.41. The willingness‐to‐pay for perceived attributes in the artwork show that works executed in oils and gouache, and those auctioned by Deutscher‐Menzies, Sotheby's and Christies are generally associated with higher prices. Research limitations/implications – The returns on a buy‐and‐hold strategy in the Australian art market are at least comparable to the Australian stock market. While total risk is greater, the very low market risk found in almost all artistic portfolios is suggestive of the possible benefits of portfolio diversification through art investment. Moreover, a number of artist's works offer very superior market and non‐market risk‐adjusted performance. Originality/value – This is the first Australian study to construct measures of risk, return, β and Sharpe and Treynor ratios for individual Australian artists. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting Research Journal Emerald Publishing

Australian fine art as an alternative investment

Accounting Research Journal, Volume 21 (1): 12 – Aug 28, 2008

Loading next page...
 
/lp/emerald-publishing/australian-fine-art-as-an-alternative-investment-CmvqN07iEY
Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
1030-9616
DOI
10.1108/10309610810891346
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to examine the investment characteristics of works by leading Australian artists. Design/methodology/approach – About 35,805 paintings by 45 leading Australian artists sold at auction are used to construct individual hedonic price indices. The attributes included in each artist's hedonic regression model include the size and medium of the painting and the auction house and year sold. Findings – The indexes show that average annual returns across all artists range between 4 and 15 per cent with a mean of 8 per cent, with the highest returns for works by Brett Whiteley, Jeffrey Smart, Cecil Brack and Margaret Olley. Risk‐adjusted returns are generally lower, with reward‐to‐volatility and reward‐to‐variability ratios averaging 1.5 and 5.8 per cent, respectively. The portfolio β s for individual artistic works average 0.41. The willingness‐to‐pay for perceived attributes in the artwork show that works executed in oils and gouache, and those auctioned by Deutscher‐Menzies, Sotheby's and Christies are generally associated with higher prices. Research limitations/implications – The returns on a buy‐and‐hold strategy in the Australian art market are at least comparable to the Australian stock market. While total risk is greater, the very low market risk found in almost all artistic portfolios is suggestive of the possible benefits of portfolio diversification through art investment. Moreover, a number of artist's works offer very superior market and non‐market risk‐adjusted performance. Originality/value – This is the first Australian study to construct measures of risk, return, β and Sharpe and Treynor ratios for individual Australian artists.

Journal

Accounting Research JournalEmerald Publishing

Published: Aug 28, 2008

Keywords: Arts; Prices; Investments; Australia

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create folders to
organize your research

Export folders, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month