Long Day’s Journey

Economists Nauro Campos and Renata Leite have been analyzing seven years worth of data from the Latin American art market.

Our results suggest that: (i) the reputation of an artist and the provenance of the artwork, often omitted variables in previous studies, seem to be more important determinants of the sale price of a painting than more standard factors, such as medium and size, (ii) the opinion of art experts seems to be of limited use in predicting whether or not an artwork sells at auction, (iii) there is little supporting evidence for the widespread notion that the best or more expensive artworks tend to generate above average returns (the “masterpiece effect”), although (iv) there is strong evidence in our data for the declining price anomaly or “afternoon effect” (that is, when heterogeneous products sold sequentially follow a decreasing pattern of prices.)

(Summary here; working paper here; via.) Today’s assignment: consider the implications, if any, for the business of classical music presentation, in currencies both real and curious.

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