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on Cultural Economics |
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Issue of 2014‒07‒21
five papers chosen by Roberto Zanola Università degli Studi del Piemonte Orientale “Amedeo Avogadro” |
| By: | Kathryn Graddy (Department of Economics, International Business School, Brandeis University); Jonathan Hamilton (Department of Economics, Warrington College of Business, University of Florida) |
| Abstract: | Auction houses use both in-house and third-party guarantees for sellers who are concerned about the risk that not enough bidders will enter the auction for their works. Auction houses are compensated for guarantees by buyers’ commissions and successful sales after attracting important works of art. Sellers compensate third-party guarantors by splitting the excess of the final sale price over the guarantee. The guarantor can bid in the auction, and at Christie's, the third-party guarantor still receives a share of the difference between the winning price and the guarantee price, even if he wins the auction, which means the guarantor has a “toeholdâ€. We explore the effect of guarantees (both in-house and third-party) on prices in art auctions, using a large database of auctions and a smaller database of repeat sales. |
| Keywords: | Auctions; economics of art; price guarantees; toeholds in auctions |
| JEL: | Z11 Z18 D44 L82 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:cue:wpaper:awp-02-2014&r=cul |
| By: | Jenny Rae Hawkins (Department of Economics, Oberlin College); Viplav Saini (Department of Economics, Oberlin College) |
| Abstract: | The market for modern Indian art is an emerging art market, having come into a proper existence only in the late 1990s. This market saw tremendous growth in its initial years and then a downturn that started around 2007-2008. Using data from auctions conducted by a major Indian art auctioneer, we estimate via hedonic regression a price index for paintings and drawings by Indian artists sold during 2000-2013. We are able to thus estimate a rate of return on Indian art as an investment and also shed light on what drives the price of a painting in the Indian market. In doing so, we document quantitatively the extent of the rise and fall in Indian art prices. We also distinguish empirically two segments in the Indian art market, namely modern painters and contemporary painters, who appear to command different prices at auction. We find a positive and statistically significant relationship between the state of the Indian stock market and art auction prices. Finally, we use our econometric results to construct a ranking of Indian painters in terms of the market prices for their work. |
| Keywords: | art, auction, India, price index, hedonic regression |
| JEL: | C20 Z11 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:cue:wpaper:awp-03-2014&r=cul |
| By: | Jellal, Mohamed |
| Abstract: | In this paper , we consider an economic growth model with human capital accumulation , positive externalities and a cultural system of social norms . We show that endogenous rational emergence of this cultural belief may lead to increasing the stock of human capital and hence accelerating national growth.The mechanism of this internalization is based on the existence of endogenous social status or identity pattern that encourages the accumulation of knowledge. This cultural norm is presented as an informal mechanism or informal institution which may be an effective substitute tool to a the formal institution given by a system of income taxation. |
| Keywords: | Culture, Social Norms, Education, Economic Growth, Formal institutions |
| JEL: | H23 I21 I25 O1 O43 Z1 |
| Date: | 2014–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57267&r=cul |
| By: | Kathryn Graddy (Department of Economics, International Business School, Brandeis University); Lara Loewenstein (Brandeis University); Jianping Mei (Cheung Kong Graduate School of Business); Mike Moses (Beautiful Asset Advisors LLC); Rachel A J Pownall (Maastricht University and Tilburg University) |
| Abstract: | We find evidence for the behavioral biases of anchoring and loss aversion. We find that anchoring is more important for items that are resold quickly, and we find that the effect of loss aversion increases with the time that a painting is held. The evidence in favor of anchoring and loss aversion with this large dataset validates previous results and adds to the empirical evidence a finding of increasing loss aversion with the length a painting is held. We do not find evidence that investors can take advantage of these behavioral biases. |
| Keywords: | D03, D44, Z11 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:cue:wpaper:awp-04-2014&r=cul |
| By: | Georgescu, George |
| Abstract: | Due to the extent of markets globalization and of cross-border fragmentation of world production, the international value-added chains development brought about new challenges for emerging countries, many from SEE area, including Romania. The benefits for host countries arising from global production relocating on their territory could be significant in terms of employment, but maintaining active and even enriching the local work skills and cultural heritage. At the same time, these international transactions (through processing trade and/or FDI inflows) create vulnerabilities at the local level. The risks for host countries associated to other areas relocation of production could be mitigated by developing innovative and entrepreneurship heritage as drivers of sustainable growth and post-crisis economic recovery. |
| Keywords: | international fragmentation of production; processing trade; FDI; entrepreneurship heritage; innovative heritage |
| JEL: | A13 F21 L26 Z10 |
| Date: | 2014–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57255&r=cul |