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Art in Africa: Hedonic price analysis of the South African fine art auction market, 2009–2014

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  • Fedderke, Johannes W.
  • Li, Kaini
Abstract
Real asset markets are characterized by illiquidity and heterogeneous assets, presenting challenges to price estimators. Use of a new dataset of 7,553 auction fine art lots brought to market in South Africa, for 2009–14, allows us to examine the full sales hedonic price estimator over a wide set of characteristics. Results validate full sale hedonic pricing: Identities of artists, medium and genre, dating characteristics, and physical characteristics of artwork are significant. External validity of hedonic pricing is supported by out-of-sample price prediction for 40 individual artists. Auction house catalogue presentation of art work also proves correlated with realized auction prices. Art as an asset finds support: art prices move countercyclically with GDP and domestic equity markets, pro-cyclically with off-shore equity markets, implying a risk diversification role. JEL Codes: D1, L8. Keywords: hedonic price equation, art market, South Africa Word Count: 9467 (including all Tables, Figures, References).

Suggested Citation

  • 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.
    • Handle: RePEc:eee:ecmode:v:84:y:2020:i:c:p:88-101
    DOI: 10.1016/j.econmod.2019.03.011
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    5. Fedderke, Johannes W. & Chen, Tinghua, 2023. "Generalizing the “Masterpiece Effect” in fine art pricing: Quantile Hedonic regression results for the South African fine art market, 2009–2021," Economic Modelling, Elsevier, vol. 124(C).
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    More about this item

    Keywords

    Hedonic price equation; Art market; South Africa;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • L8 - Industrial Organization - - Industry Studies: Services

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