Is art market behaviour predictable?
Is there a
relation between art prices and the financial markets and, if there is, can we
use this relation to predict these prices?
In the last
few decades the financial markets have been spread all over the world and
investing and speculating have become two important phenomena. As a consequence
art is no longer just about collecting, it’s about making money.
Although
art is a quiet subjective matter, the price of a certain piece results from a
general agreement on the value, and is therefore quiet objective. This means econometrics, an objective, measurements based science can be
used to investigate the link between art and financial markets. Using statistic
methods, an index representing the behaviour of the art markets is compiled and
compared with the behaviour of the financial markets in a certain period of
time. Comparison shows us that art and
financial markets have rough link, but also that lags occur. We also conclude
that using financial evolutions to predict the art market is not a good idea.
We can say
that the article shows us that evolutions in art markets are similar to those
in financial markets, however, art is very personal and can be related to
trends, etc. and is therefore quiet
unpredictable.
Renaat
Pieters
http://www.sciencedirect.com/science/article/pii/0014292194000588
I think it’s interesting to know that although there has been an incredible boom in art prices, the pricing in art is still roughly linked with the financial markets. So maybe art market behavior can be predictable.
BeantwoordenVerwijderenWard
Despite the lags, I am convinced there is a strong link between art and the financial markets. Financial markets have a huge influence on the art sales, for example when there is a huge profit range in the financial markets, I guess most of the sales will be made in the financial markets.. So there is a negative influence on the art prices. Although I agree with your opinion that sales are not always this objective, so we can conclude this link is not as strong as I thought before.
Verwijderenmatthias van der schueren
While I agree that the financials market will have an influence on the art market, I don't think it is as huge as you make it appear. It will have an influence but will be mainly dominated by what the buyers think they can get out of it. If the investor thinks it will get him a huge profit, he will take the risk nevertheless.
VerwijderenRaphael Truyens
Quantifying the influence is not easy. I agree with Matthias that most of the sales will be made in the market with the biggest profit range, but in my opinion there is also a different relation. I think that if profits are made on the financial markets, the confidence of the investors will be high. They will gain money from the financial markets and a part of this money can be invested in art and therefore high profits ranges on the financial markets can also have a positive influence on the art markets.
VerwijderenRenaat Pieters