Art and the Economy: A First Look at the Market for Paintings in Turkey

Aylin Seckin and Erdal Atukeren

Economics Bulletin, 2006, vol. 26, issue 3, pages 1-13

Abstract: We investigate the relationships between the return on investments in paintings and other financial investments in Turkey. To this aim, we estimate a hedonic price index for a portfolio of Turkish painters. We find that investing in the market for paintings is a viable alternative even in an environment of high inflation and large macroeconomic volatility. The portfolio under investigation yielded a small but positive real return. Still, stock market returns are higher than the returns in the art market. Furthermore, we find a rather high correlation between stock returns and art market returns. However, the returns to investing in paintings are negatively correlated with the returns on traditional investment alternatives in a developing country context, such as foreign exchange, gold, and bank deposits. Hence, there might exist some room for portfolio diversification. Nevertheless, the time horizon of the investments is a key factor especially in portfolios involving art objects.

Keywords: Art as an investment; Art auctions; Emerging markets; Hedonic price index; Turkish paintings (search for similar items in EconPapers)
JEL-codes: Z1 G1 (search for similar items in EconPapers)
Date: 2006-09-05
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