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Licensed Unlicensed Requires Authentication Published by De Gruyter September 11, 2013

Why Invest In Art?

  • Bruno S. Frey

    Bruno S. Frey is Professor of Economics at the Zeppelin University in Friedrichshafen (Germany). In addition, he is director of the Center for Research in Economics, Management and the Arts (CREMA), Basel, Switzerland. His research analyzes the economics of art and culture, the use of awards, and the economics of happiness.

    and Reto Cueni

    Reto Cueni is a Doctoral Student and Lecturer at the University of Zurich, Switzerland. He focuses on empirical research on herding behavior in different markets, such as the art or the financial market.

From the journal The Economists’ Voice

Abstract

In recent years, the art market experienced a price explosion for paintings. Frey and Cueni shed light on the reasons for the price increase, on the rate of return in the art market, on the emergence and decline of art hedge funds, and on the risks of art investments.


Corresponding author: Bruno S. Frey, Zeppelin University, Germany; and CREMA-Center for Research in Economics, Management and the Arts, Switzerland, e-mail:

About the authors

Bruno S. Frey

Bruno S. Frey is Professor of Economics at the Zeppelin University in Friedrichshafen (Germany). In addition, he is director of the Center for Research in Economics, Management and the Arts (CREMA), Basel, Switzerland. His research analyzes the economics of art and culture, the use of awards, and the economics of happiness.

Reto Cueni

Reto Cueni is a Doctoral Student and Lecturer at the University of Zurich, Switzerland. He focuses on empirical research on herding behavior in different markets, such as the art or the financial market.

References and Further Reading

Baumol, William. 1986. “Unnatural Value: Or Art Investment as Floating Crap Game.” American Economic Review (Papers and Proceedings) 76 (2): 10–14.Search in Google Scholar

Carolin Copley. 2012. “Art Basel Tests Buyers’ Instincts in time of crisis.” June 13. http://www.reuters.com/article/2012/06/13/uk-arts-basel-idUSLNE85C01E20120613.Search in Google Scholar

Davidson, Adam. 2012. “How the Art Market Thrives on Inequality.” The New York Times, May 30. http://www.nytimes.com/2012/06/03/magazine/how-the-art-market-thrives-on-inequality.html.Search in Google Scholar

Dimson, Elroy and Christophe Spaenjers. 2011. “Ex Post: The Investment Performance of Collectible Stamps.” Journal of Financial Economics 100: 443–458.10.1016/j.jfineco.2010.12.005Search in Google Scholar

Frey, Bruno S. 2003. Arts & Economics: Analysis & Cultural Policy. Berlin, Heidelberg, New York: Springer.Search in Google Scholar

Frey, Bruno S. and Werner Pommerehne. 1989. Muses and Markets: Explorations in the Economics of the Arts. Oxford: Basil Blackwell.Search in Google Scholar

Frey, Bruno S. and Reiner Eichenberger. 1995. “On the Rate of Return in the Art Market: Survey and Evaluation.” European Economic Review 39 (3–4): 528–537.10.1016/0014-2921(94)00059-9Search in Google Scholar

Goetzmann, William, Luc Renneboog and Christophe Spaenjers. 2011. “Art and Money.” American Economic Review (AEA Papers and Proceedings) 101: 222–226.10.1257/aer.101.3.222Search in Google Scholar

Melikian, Souren. 2012. “The Impoverished Connoisseurs.” The New York Times, September 12. http://www.nytimes.com/2012/09/13/arts/13iht-rartmelikian13.html?_r=1&ref=sourenmelikian.Search in Google Scholar

Renneboog, Luc and Christophe Spaenjers. 2013. “Buying Beauty: On Prices and Returns in the Art Market.” Management Science 59 (1): 36–53.10.1287/mnsc.1120.1580Search in Google Scholar

Rogers, Joshua. 2012. “How to Outsmart the Billionaires Who′ll Bid $80 Million for The Scream.” April 4. http://www.forbes.com/sites/joshuarogers/2012/04/04/how-to-outsmart-the-billionaires-wholl-bid-80-million-for-the-scream/.Search in Google Scholar

Segal, Jeff and Jeffrey Goldfarb. 2009. “Art Appreciated as Inflation Hedge.” The New York Times, May 12. http://www.nytimes.com/2009/05/12/business/12views.html.Search in Google Scholar

The Wall Street Journal. 2009 “The Million-Dollar Penny.” November 19. http://online.wsj.com/article/SB10001424052748703811604574533732182243424.html.Search in Google Scholar

Published Online: 2013-09-11
Published in Print: 2013-12-01

©2013 by Walter de Gruyter Berlin Boston

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