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Price determinants of Aboriginal art, and its role as an alternative asset class

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  • Taylor, Dominic
  • Coleman, Les
Abstract
This paper analyzes auction results for over 4000 paintings by Australian Aboriginal artists to investigate determinants of prices in the Aboriginal art market. This is the first financial study of an indigenous art market, and hedonic, repeat sales and hybrid regression analyses find it shares price determinants with traditional art markets (with price premia attached to artist name, death, painting size, leading auction house, and winter sale). However, Aboriginal art's unique features significantly affect prices, particularly works that use traditional Aboriginal media and those with reputation-affirming traits. An Aboriginal Art Index provides 6.6% annual return (standard deviation 17.9%), which is comparable to traditional asset classes and superior on a risk-adjusted basis. Returns to Aboriginal art are negatively correlated with returns from other assets, and so it adds value to a diversified investment portfolio.

Suggested Citation

  • Taylor, Dominic & Coleman, Les, 2011. "Price determinants of Aboriginal art, and its role as an alternative asset class," Journal of Banking & Finance, Elsevier, vol. 35(6), pages 1519-1529, June.
    • Handle: RePEc:eee:jbfina:v:35:y:2011:i:6:p:1519-1529
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    2. Garay, Urbi & Puggioni, Gavino & Molina, German & ter Horst, Enrique, 2022. "A Bayesian dynamic hedonic regression model for art prices," Journal of Business Research, Elsevier, vol. 151(C), pages 310-323.
    3. Arthur Korteweg & Roman Kräussl & Patrick Verwijmeren, 2016. "Does it Pay to Invest in Art? A Selection-Corrected Returns Perspective," The Review of Financial Studies, Society for Financial Studies, vol. 29(4), pages 1007-1038.
    4. Fedderke, Johannes W. & Li, Kaini, 2020. "Art in Africa: Hedonic price analysis of the South African fine art auction market, 2009–2014," Economic Modelling, Elsevier, vol. 84(C), pages 88-101.
    5. Lan Ju & Zhiyong Tu & Changyong Xue, 2020. "Pricing the Information Quantity in Artworks," Papers 2011.09129, arXiv.org.
    6. Park, Heungju & Ju, Lan & Liang, Tianyu & Tu, Zhiyong, 2017. "Horizon analysis of art investments: Evidence from the Chinese market," Pacific-Basin Finance Journal, Elsevier, vol. 41(C), pages 17-25.
    7. Sun, Qinglin & Zhang, Zhiyuan, 2023. "Can art hedge against economic policy uncertainty?: New insights through the NARDL model," Finance Research Letters, Elsevier, vol. 54(C).
    8. Garay, Urbi, 2021. "Determinants of art prices and performance by movements: Long-run evidence from an emerging market," Journal of Business Research, Elsevier, vol. 127(C), pages 413-426.
    9. Kateryna Anatoliyevna Kopyl & John Byong-Tek Lee, 2016. "How safe are the safe haven assets?," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 30(4), pages 453-482, November.
    10. Lan Ju & Zhiyong Tu & Changyong Xue, 2019. "Art Pricing with Computer Graphic Techniques," Papers 1910.03800, arXiv.org.
    11. Garay, Urbi & Pérez, Eduardo & Pulga, Fredy, 2022. "Color intensity variations and art prices: An examination of Latin American art," Journal of Business Research, Elsevier, vol. 147(C), pages 158-176.
    12. Binge, Laurie H. & Boshoff, Willem H., 2021. "Measuring alternative asset prices in an emerging market: The case of the South African art market," Emerging Markets Review, Elsevier, vol. 47(C).
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    15. Emmanuel Joel Aikins Abakah & Aviral Kumar Tiwari & Emmanuel Kwesi Arthur & Luis Alberiko Gil-Alana, 2023. "The influence of economic policy uncertainty shocks on art market," Applied Economics, Taylor & Francis Journals, vol. 55(29), pages 3404-3421, June.
    16. Szyszka Adrianna & Białowąs Sylwester, 2019. "Prices of works of art by living and deceased artists auctioned in Poland from 1989 to 2012," Economics and Business Review, Sciendo, vol. 5(4), pages 112-127, December.

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