| Author/Presenter |
Aylin Seckin (Istanbul Bilgi University) |
| Co-author |
Erdal Atukeren (KOF / ETH Zurich) |
| Title |
Art as an Investment under High Inflation: An Empirical Study on Turkish Paintings |
| Abstract |
In this paper, we investigate the relationships between the return on investments in art objects and other financial investments for a developing country with a volatile macroeconomic environment and high inflation rates. In particular, we take Turkey as a case study. Since there is no price index for the market for art objects in Turkey, we first construct a hedonic price index for Turkish paintings. The methodology follows, among others, Hodgson and Vorkink (2004, CJE) and Higgs and Worthinghton (2003, Economic Record). The data are obtained from established art galeries and auction houses in Istanbul - where the art market is more active. As a by-product of the hedonic price index, we also test for the hypotheses associated with certain characteristics of the objects included in the sample. Next, we examine whether hedonic prices for Turkish contemporary paintings move in line with macroeconomic fundamentals. An interesting question is the examination of the art market reaction to economic crises (such as the one in 2001) in Turkey. In this context, we also investigate the presence of (rational) bubbles. Finally, we compare the performance of art market investments vis-a-vis the investment in stocks, government bonds, and foreign exchange. |
|