Art as an Aternative Asset Class: Risk and Return Characteristics of the Middle Eastern & Northern African Art Markets

Roman Kräussl

LSF Research Working Paper Series from Luxembourg School of Finance, University of Luxembourg

Abstract: This chapter analyzes the risk and return characteristics of investments in artists from the Middle East and Northern Africa (MENA) region over the sample period 2000 to 2012. With hedonic regression modeling we create an annual index that is based on 3,544 paintings created by 663 MENA artists. Our empirical results prove that investing in such a hypothetical index provides strong financial returns. While the results show an exponential growth in sales since 2006, the geometric annual return of the MENA art index is a stable13.9 percent over the whole period. We conclude that investing in MENA paintings would have been profitable but also note that we examined the performance of an emerging art market that has only seen an upward trend without any correction, yet.

Keywords: Alternative investments; Art price index; Optimal Asset Allocation (search for similar items in EconPapers)
JEL-codes: G11 Z11 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-ara and nep-cul
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Art as an alternative asset class: Risk and return characteristics of the Middle Eastern & Northern African art markets (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:crf:wpaper:14-10

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