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Abstract

This paper introduces a new financial metric for the art market. The metric, which we call Artistic Power Value APV, is based on the price per unit of area dollars per square centimeter and is applicable to two-dimensional art objects such as paintings. In addition to its intuitive appeal and ease of computation, this metric has several advantages from the investor’s viewpoint. For example, it makes it easy to: i estimate price ranges for different artists; ii perform comparisons among them; iii follow the evolution of the artists’ creativity cycle overtime; and iiii compare, for a single artist, paintings with different subjects or different geometric properties. Additionally, the APV facilitates the process of estimating total returns. Finally, due to its transparency, the APV can be used to design derivatives-like instruments that can appeal to both, investors and speculators. Several examples validate this metric and demonstrate its usefulness.



Item Type: MPRA Paper -

Original Title: A new financial metric for the art market-

English Title: A new financial metric for the art market-

Language: English-

Keywords: Art markets. Hedonic models. Paintings. Auction prices. Alternative Investments.-

Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal ModelsD - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - AuctionsG - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment DecisionsG - Financial Economics > G1 - General Financial Markets > G12 - Asset Pricing ; Trading Volume ; Bond Interest RatesZ - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology-





Author: Charlin, Ventura

Source: https://mpra.ub.uni-muenchen.de/57139/



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