An empirical analysis of art investor behaviour price determinants and art investment

Abstract

This dissertation is profound exploration of demand and supply side of art market at both primary and secondary level by adoption of hybrid methodologies. The primary art market research was primarily newlinefocused on identification of art investor profiles by the conducting 20 in-depth interviews followed by survey of 100 domestic and international art investors at various art fairs and events encapsulating newlinediverse demographics. The data procured from questionnaire was evaluated using factor analysis. The respondents were clustered on the basis of investment criteria and inherent motives identified from factor analysis by employing cluster analysis. Three categories were identified namely rational investors, social strivers, and confident conservatives. newlineThis thesis investigates the application of hedonic price index for identification of price predictors of Indian modern and contemporary art auctioned between 2001 and 2018. The sensitivity to living status newlineof the artist and painting executed in oil fetch higher premiums at auctions was indicated. The time dummies from regression was used for construction of Indian Art Index, which was further employed for newlineexamining the interactions of art market performance with equities and gold price indices. It was established that art index has positive returns and low volatility making it fit for investment purpose. newlineAdditionally, negative correlation between art and gold indicates inclusion of art in a diversified portfolio for value reservation and risk mitigation. This study aids investors and consultants to make newlineinformed decisions in the rather incomprehensible art. newline