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Australian fine art as an alternative investment

Andrew C. Worthington (Department of Accounting, Finance and Economics, Griffith University, Gold Coast, Australia)
Helen Higgs (Department of Accounting, Finance and Economics, Griffith University, Gold Coast, Australia)

Accounting Research Journal

ISSN: 1030-9616

Article publication date: 28 August 2008




The purpose of this paper is to examine the investment characteristics of works by leading Australian artists.


About 35,805 paintings by 45 leading Australian artists sold at auction are used to construct individual hedonic price indices. The attributes included in each artist's hedonic regression model include the size and medium of the painting and the auction house and year sold.


The indexes show that average annual returns across all artists range between 4 and 15 per cent with a mean of 8 per cent, with the highest returns for works by Brett Whiteley, Jeffrey Smart, Cecil Brack and Margaret Olley. Risk‐adjusted returns are generally lower, with reward‐to‐volatility and reward‐to‐variability ratios averaging 1.5 and 5.8 per cent, respectively. The portfolio βs for individual artistic works average 0.41. The willingness‐to‐pay for perceived attributes in the artwork show that works executed in oils and gouache, and those auctioned by Deutscher‐Menzies, Sotheby's and Christies are generally associated with higher prices.

Research limitations/implications

The returns on a buy‐and‐hold strategy in the Australian art market are at least comparable to the Australian stock market. While total risk is greater, the very low market risk found in almost all artistic portfolios is suggestive of the possible benefits of portfolio diversification through art investment. Moreover, a number of artist's works offer very superior market and non‐market risk‐adjusted performance.


This is the first Australian study to construct measures of risk, return, β and Sharpe and Treynor ratios for individual Australian artists.



Worthington, A.C. and Higgs, H. (2008), "Australian fine art as an alternative investment", Accounting Research Journal, Vol. 21 No. 1, pp. 55-66.



Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

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