Art in Africa: Hedonic price analysis of the South African fine art auction market, 2009–2014

Research output: Contribution to journalArticle

Abstract

Real asset markets are characterized by illiquidity and heterogeneous assets, presenting challenges to price estimators. Use of a new dataset of 7,553 auction fine art lots brought to market in South Africa, for 2009–14, allows us to examine the full sales hedonic price estimator over a wide set of characteristics. Results validate full sale hedonic pricing: Identities of artists, medium and genre, dating characteristics, and physical characteristics of artwork are significant. External validity of hedonic pricing is supported by out-of-sample price prediction for 40 individual artists. Auction house catalogue presentation of art work also proves correlated with realized auction prices. Art as an asset finds support: art prices move countercyclically with GDP and domestic equity markets, pro-cyclically with off-shore equity markets, implying a risk diversification role. JEL Codes: D1, L8. Keywords: hedonic price equation, art market, South Africa Word Count: 9467 (including all Tables, Figures, References).

Original languageEnglish (US)
Pages (from-to)88-101
Number of pages14
JournalEconomic Modelling
Volume84
DOIs
StatePublished - Jan 2020

Fingerprint

Hedonic price analysis
Africa
Auctions
Art
Auction market
Assets
South Africa
Hedonic prices
Artist
Estimator
Hedonic pricing
Equity markets
Prediction
External validity
Art market
Illiquidity
Key words
Risk diversification
Asset markets

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

@article{1989decfb30f44adb1c9a369a9295f9e,
title = "Art in Africa: Hedonic price analysis of the South African fine art auction market, 2009–2014",
abstract = "Real asset markets are characterized by illiquidity and heterogeneous assets, presenting challenges to price estimators. Use of a new dataset of 7,553 auction fine art lots brought to market in South Africa, for 2009–14, allows us to examine the full sales hedonic price estimator over a wide set of characteristics. Results validate full sale hedonic pricing: Identities of artists, medium and genre, dating characteristics, and physical characteristics of artwork are significant. External validity of hedonic pricing is supported by out-of-sample price prediction for 40 individual artists. Auction house catalogue presentation of art work also proves correlated with realized auction prices. Art as an asset finds support: art prices move countercyclically with GDP and domestic equity markets, pro-cyclically with off-shore equity markets, implying a risk diversification role. JEL Codes: D1, L8. Keywords: hedonic price equation, art market, South Africa Word Count: 9467 (including all Tables, Figures, References).",
author = "Fedderke, {Johannes W.} and Kaini Li",
year = "2020",
month = "1",
doi = "10.1016/j.econmod.2019.03.011",
language = "English (US)",
volume = "84",
pages = "88--101",
journal = "Economic Modelling",
issn = "0264-9993",
publisher = "Elsevier",

}

Art in Africa : Hedonic price analysis of the South African fine art auction market, 2009–2014. / Fedderke, Johannes W.; Li, Kaini.

In: Economic Modelling, Vol. 84, 01.2020, p. 88-101.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Art in Africa

T2 - Hedonic price analysis of the South African fine art auction market, 2009–2014

AU - Fedderke, Johannes W.

AU - Li, Kaini

PY - 2020/1

Y1 - 2020/1

N2 - Real asset markets are characterized by illiquidity and heterogeneous assets, presenting challenges to price estimators. Use of a new dataset of 7,553 auction fine art lots brought to market in South Africa, for 2009–14, allows us to examine the full sales hedonic price estimator over a wide set of characteristics. Results validate full sale hedonic pricing: Identities of artists, medium and genre, dating characteristics, and physical characteristics of artwork are significant. External validity of hedonic pricing is supported by out-of-sample price prediction for 40 individual artists. Auction house catalogue presentation of art work also proves correlated with realized auction prices. Art as an asset finds support: art prices move countercyclically with GDP and domestic equity markets, pro-cyclically with off-shore equity markets, implying a risk diversification role. JEL Codes: D1, L8. Keywords: hedonic price equation, art market, South Africa Word Count: 9467 (including all Tables, Figures, References).

AB - Real asset markets are characterized by illiquidity and heterogeneous assets, presenting challenges to price estimators. Use of a new dataset of 7,553 auction fine art lots brought to market in South Africa, for 2009–14, allows us to examine the full sales hedonic price estimator over a wide set of characteristics. Results validate full sale hedonic pricing: Identities of artists, medium and genre, dating characteristics, and physical characteristics of artwork are significant. External validity of hedonic pricing is supported by out-of-sample price prediction for 40 individual artists. Auction house catalogue presentation of art work also proves correlated with realized auction prices. Art as an asset finds support: art prices move countercyclically with GDP and domestic equity markets, pro-cyclically with off-shore equity markets, implying a risk diversification role. JEL Codes: D1, L8. Keywords: hedonic price equation, art market, South Africa Word Count: 9467 (including all Tables, Figures, References).

UR - http://www.scopus.com/inward/record.url?scp=85064197869&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85064197869&partnerID=8YFLogxK

U2 - 10.1016/j.econmod.2019.03.011

DO - 10.1016/j.econmod.2019.03.011

M3 - Article

AN - SCOPUS:85064197869

VL - 84

SP - 88

EP - 101

JO - Economic Modelling

JF - Economic Modelling

SN - 0264-9993

ER -