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Art in times of crisis
David,Géraldine Li,Yuexin Oosterlinck,Kim Renneboog,Luc
David,Géraldine
Li,Yuexin
Oosterlinck,Kim
Renneboog,Luc
Abstract
We trace the long-term performance of the UK art market across a broad set of crises: world wars, economic recessions, financial crises, inflationary periods, and changes in monetary policy. By means of digitalized historical auction archives, we construct art price indices from the early twentieth century onwards and disclose that annual art auction value grew, in real terms, more than seven-fold over this period. The arithmetic annual real return and risk amount to 3.6 per cent and 20.1 per cent, respectively. Art returns plummeted at the onset of wars, but turned positive in the second half of wars when they outperformed stocks, suggesting that art was seen as a safe haven in times of political turmoil. During wars, smaller – and thus more transportable – paintings obtained higher returns. Art returns are sensitive to economic and financial crises, with the largest slumps occurring during the Great Depression, oil crisis, recessions of the early 1980s and early 1990s, and the Great Recession. We also document changes in art preferences for paintings’ sizes, schools, liquid art, and artists’ nationalities across crises. Art enters a broad optimal asset portfolio both in non-crisis periods and during war times.
Description
Publisher Copyright: © 2024 Economic History Society.
Date
2024-11
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
Organizational Units
Journal Issue
Keywords
art market, financial crises, war, SDG 10 - Reduced Inequalities, SDG 17 - Partnerships for the Goals
Citation
David, G, Li, Y, Oosterlinck, K & Renneboog, L 2024, 'Art in times of crisis', Economic History Review, vol. 77, no. 4, pp. 1362-1413. https://doi.org/10.1111/ehr.13327
License
info:eu-repo/semantics/openAccess