On rarity premium and ownership yield in art

Geman, H. and Velez, T.M. 2015. On rarity premium and ownership yield in art. The Journal of Alternative Investments. 18 (1), pp. 8-21. https://doi.org/10.3905/jai.2015.18.1.008

TitleOn rarity premium and ownership yield in art
TypeJournal article
AuthorsGeman, H. and Velez, T.M.
Abstract

In recent years, the art market has been characterized by final auction prices greatly exceeding the ex ante estimates published by international auction houses. We define this difference as a rarity premium and build a Rarity Index by aggregating the premia relative to the mean. We also investigate the benefits, aside from financial performance, associated with art ownership and introduce the term “ownership yield” meant to encapsulate both aesthetic yield and “conspicuous possession.” This ownership yield may account for the large differences between the values of rarity indexes we construct for three famous families of paintings over the period 2003–2013, and those of repeat sales or hedonic art indexes.

JournalThe Journal of Alternative Investments
Journal citation18 (1), pp. 8-21
ISSN1520-3255
Year2015
PublisherPageant Media Ltd. (“IPR Journals”)
Digital Object Identifier (DOI)https://doi.org/10.3905/jai.2015.18.1.008
Publication dates
Published online03 Jun 2015

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Permalink - https://westminsterresearch.westminster.ac.uk/item/qv310/on-rarity-premium-and-ownership-yield-in-art


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