Evaluation of Contemporary art as an alternative investment
| Author: | Bc. Alice Havlovicová |
|---|---|
| Year: | 2020 - summer |
| Leaders: | Mgr. Lukáš Vácha Ph.D. |
| Consultants: | |
| Work type: | Bachelors |
| Language: | English |
| Pages: | 66 |
| Awards and prizes: | |
| Link: | https://is.cuni.cz/webapps/zzp/detail/213778/ |
| Abstract: | This thesis investigates the investment performance of contemporary art. In order to analyze the risks and returns of the unique art market environment, the reader is presented with the market specifics, trends, and inefficient. The financial performance of contemporary art is estimated by means of extended models of hedonic regression and repeat-sales regression. Both methods allowˇs for the treatment of volatility of the art market caused by the infrequency of trading, resulting in two monthly contemporary art market indices. The indices are estimated based on auction results of contemporary art spanning from 2003 to 2015, including all artworks sold at least once, which presents a general overview of the contemporary art market. In line with the academic literature on the topic of art investment, the results suggest lower returns of contemporary art than traditional financial assets. Volatility and Sharpe ratios differ in the two indices. Based on the resulting price indices, we conclude that contemporary art presents moderate returns of 5% per year in real U.S. dollar terms. |
