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The purpose of this paper is to observe the nature of documentation and the description used in object biographies by an auction house catalogue and an online museum collection database in relation opera costumes. This research aims to discuss the issues of cultural and economic value in relation to objects in the art world, and examine examples of object biographies for opera costumes that are sold at an auction and exhibited in a museum.

The object biographies are compared from an auction house catalogue and the online museum collection database, based on two factors: costumes worn by a famous singer and costumes designed by a famous designer.

This study identified the valuation methods of auction houses and museums, including accounting for the market value and fair value, as well as social and cultural values. The nature of the documentation also clearly shows the different purpose of the object biographies. For auction houses the biography needs to be short and specific as it provides sufficient information and is read out at the auction, while art catalogues can also be used by experts as part of the conversation to understanding heritage value, and will also be viewed and used by researchers, investors, other auction house specialists and art world professionals.

By comparing two institutions, auction houses and museums, this study has shown that the information that is documented and how it is presented in object biographies is determined by the goals of the institutions. These goals may vary or overlap in providing information, demonstrating cultural importance, to be spoken allowed to an audience and make sales, or to educate, conserve and preserve.

This study shows that to some extent museum online databases display their collection removed from cultural context, with an isolated image of the item, and in an organised, digitally accessible manner. A potential implication is that museums should not only digitally catalogue an item, but also provide discussion and the cultural background and significance of the item.

Auction catalogues are written for a specific event (the auction), while the online museum collection database is meant to be a permanent record, which aims to digitally preserve objects and provide access to images and information to a general audience, and further could be edited with amendments or new information when future research or events lead to potential updates.

This study adds to the discourse on approaches to the understanding of costumes as an art object of significance and their potential cultural, economic and heritage value, particularly as represented in the documentation of object biographies.

The purpose of this paper is to present the progress and trends of the literature on art as an investment and to outline potential research lines to be developed.

This work gathers, analyses and critically discusses the attributes of investments in art in general, and in Latin American art in particular.

Most studies report that art (art in general, and Latin American in particular) has offered relatively low but positive real returns, which have tended to be below those offered by stocks and similar to those realized by bonds. Art has a low correlation with other investments.

The literature on the attributes of Latin American art as an investment is limited and new research would help to close the knowledge gap with respect to this segment of the art market as it continues to grow.

Similarly to the research carried out into other segments of the art market, studies on Latin American art suggest that the works of art are worth more, ceteris paribus: the more renowned the artist, the larger the work, whether they were executed in oil, and if they were auctioned at Sotheby’s or Christie’s. The paper also details a series of practical implications for those who participate in the art market.

To the best of the authors’ knowledge, this is the first exhaustive review of the literature on the attributes of Latin American art as an investment. The findings of this study are useful for academics, art collectors, auction houses, gallerists and others who take part in the arts market.

Presentar los avances y las tendencias de la literatura sobre el arte como inversión, y delinear líneas de investigación a ser desarrolladas.

Este trabajo reúne, analiza y discute críticamente los atributos de inversión del arte, en general, y latinoamericano, en particular.

La mayoría de los estudios reportan que el arte (tanto el arte, en general, como el arte latinoamericano, en particular) ha ofrecido rendimientos reales positivos, aunque relativamente bajos, los cuales tienden a ser inferiores de los de las acciones y a ser similares a los de los bonos. El arte tiene una baja correlación con otras inversiones.

La literatura sobre los atributos del arte latinoamericano como inversión es limitada. Es de esperar que nuevas investigaciones permitan ir cerrando la brecha del conocimiento con respecto a esta parte del mercado del arte a la par que éste continúe creciendo.

Los estudios de arte latinoamericano sugieren, similar a las investigaciones sobre otros segmentos del mercado del arte, que las obras de arte valen más, ceteris paribus: cuando el artista es más reputado, a medida que el área de las obras es mayor, si han sido ejecutadas en óleo, y cuando son subastadas en las casas de subastas Sotheby’s o Christie’s. En el trabajo se detallan, además, una serie de implicaciones prácticas para los participantes del mercado de arte.

Hasta donde se ha podido comprobar, esta es la primera revisión exhaustiva acerca de los atributos del arte latinoamericano como inversión. Los resultados de esta investigación son de utilidad para: académicos, coleccionistas de arte, casas de subastas, galeristas, y demás participantes en el mercado del arte.

Art return indices are usually estimated based only on a few means of artistic expression (mainly paintings and drawings). Other forms of expression (e.g. sculptures and installations) are generally ignored, in part because they are three-dimensional and, hence, more difficult to measure. We analyze the price determinants as well as the return and risk of three artistic expressions (paintings, drawings and sculptures) executed by Fernando Botero, the most expensive living Latin American artist, to analyze the degree to which their risk and return attributes differ throughout a 20-year period.

We analyzed all paintings, drawings and sculptures executed by Botero and sold at Sotheby’s and Christie’s between 2000 and 2020 (a total of 707 artworks). The data and the images of each artwork were obtained from the web pages of these two auction houses. A hedonic regression was run to explain the price of each artwork and use explanatory variables that are standard in the literature. Art price indices for paintings, drawings and sculptures were constructed using the year-dummy variables estimated in the regressions. We performed a similar analysis for another artist, Carlos Cruz-Diez, as a robustness to our results.

The performance of Botero’s sculptures through time differs markedly from that of his paintings and drawings. Our results suggest that it is possible that returns estimated in the literature could suffer from a bias, as they have usually ignored the performance of sculptures and other artistic expressions. Botero’s paintings provided a return that was comparable to those of his sculptures (3.36% and 3.20%, respectively), they were two times as high as those of his drawings (1.68%). On the other hand, whereas paintings and drawings had similar annual standard deviations (26% and 25.22%, respectively), sculptures had a much smaller standard deviation (16.96%).

A limitation of the hedonic regression method lies in the need to have a significant and diverse sample to identify the true effect of each variable on the price of a good. Another limitation is that we were only able to use art prices from auctions, as this is the only comprehensive source of art price data that is publicly available. These two limitations are shared by all the studies that use the hedonic pricing model.

Our results have practical applications for art collectors and investors, as well as for artists, galleries and, in general, for the whole art market ecosystem. The risk and return attributes of the various artistic expressions of an artist can be different, and thus it makes sense to analyze each one of them individually, as well as their correlations with the other artistic expressions and with traditional and other alternative investments.

The art market is part of what is known as the “orange economy” (also known as the Creative Economy). According to the World Bank, the economic value of the creative sector is not well known or appreciated, even though cultural, creative and artistic activities are vital for our sense of well-being.

To the best of our knowledge, this is the first paper that compares the financial performance of paintings, drawings and sculptures for the case of a specific artist. We chose Botero for three reasons. First, he is a Latin American living artist who has achieved the highest levels of international sales. Second, Botero has worked extensively on various artistic expressions (oil paintings, drawings on different materials and sculptures) throughout his life, a characteristic that is essential to be able to carry out our study. Third, there is a long record of auction sales for each of Botero’s artistic expressions.

Los índices de rentabilidad del arte generalmente se estiman basándose únicamente en unos pocos medios de expresión artística (principalmente pinturas y dibujos). Otras formas de expresión artística (por ejemplo, esculturas e instalaciones) generalmente se ignoran, en parte porque son tridimensionales y, por tanto, más difíciles de medir. Analizamos los determinantes del precio, así como el retorno y el riesgo de tres expresiones artísticas (pinturas, dibujos y esculturas) ejecutadas por Fernando Botero, el artista latinoamericano vivo más caro, para analizar en qué medida sus atributos de riesgo y retorno difieren a lo largo del tiempo, en un período de 20 años.

Analizamos todas las pinturas, dibujos y esculturas ejecutadas por Botero y vendidas en Sotheby’s y Christie’s entre 2000 y 2020 (un total de 707 obras de arte). Los datos y las imágenes de cada obra se obtuvieron de las páginas web de estas dos casas de subastas. Se realizó una regresión hedonante para explicar el precio de cada obra de arte y se utilizaron variables explicativas estándar en la literatura. Los índices de precios de arte para pinturas, dibujos y esculturas se construyeron utilizando variables ficticias anuales estimadas en las regresiones. Realizamos un análisis similar para otro artista, Carlos Cruz-Diez, como análisis de robustez de nuestros resultados.

El desempeño de las esculturas de Botero a través del tiempo difiere marcadamente del de sus pinturas y dibujos. Nuestros resultados sugieren que es posible que los retornos estimados en la literatura sufran un sesgo, ya que generalmente han ignorado el desempeño de esculturas y otras expresiones artísticas. Las pinturas de Botero proporcionaron un retorno comparable al de sus esculturas (3.36% y 3.20%, respectivamente), pero fueron dos veces superiores a los de sus dibujos (1.68%). Por otro lado, mientras que las pinturas y los dibujos tuvieron desviaciones estándar anuales similares (26% y 25.22%, respectivamente), las esculturas tuvieron una desviación estándar mucho menor (16.96%).

Una limitación del método de regresión hedónica radica en la necesidad de contar con una muestra significativa y diversa para identificar el verdadero efecto de cada variable sobre el precio de un bien. Otra limitación consiste en que solo pudimos utilizar precios de arte de subastas, ya que esta es la única fuente completa de datos sobre precios de arte que está disponible públicamente. Estas dos limitaciones son compartidas por todos los estudios que utilizan el modelo de precios hedónico.

Nuestros resultados tienen aplicaciones prácticas para coleccionistas e inversores de arte, así como también para artistas, galerías y, en general, para todo el ecosistema del mercado del arte. Los atributos de riesgo y retorno de las diversas expresiones de un artista pueden ser diferentes, por lo que tiene sentido analizar cada una de ellas individualmente, así como sus correlaciones con las otras expresiones artísticas y con las inversiones tradicionales y otras alternativas.

El mercado del arte forma parte de lo que se conoce como “economía naranja” (también conocida como Economía Creativa). Según el Banco Mundial, el valor económico del sector creativo no es bien conocido ni apreciado, a pesar de que las actividades culturales, creativas y artísticas son vitales para nuestra sensación de bienestar.

Hasta donde hemos podido comprobar, este es el primer artículo que compara el desempeño financiero de pinturas, dibujos y esculturas para el caso de un artista específico. Elegimos a Botero por tres razones. En primer lugar, es el artista vivo latinoamericano que ha alcanzado los mayores niveles de ventas internacionales. En segundo lugar, Botero ha trabajado extensamente en diversas expresiones artísticas (óleos, dibujos sobre distintos materiales y esculturas) a lo largo de su vida, característica que resulta fundamental para poder realizar nuestro estudio. En tercer lugar, existe un largo historial de ventas en subasta de cada una de las expresiones artísticas de Botero.

Commercial auctions of cultural goods are typically brokerage arrangements where potential buyers may consider pre-sale estimates (PSEs) in bidding. The economic theory suggests that PSEs should provide honest guidance – winning bids should, on average, equal PSEs – but available research from fine art and antique auctions finds otherwise. The authors examine this relationship for commercial auctions of fine wine – items which, unlike fine art and antiques, are widely traded so that bidders may more knowledgably interpret PSEs.

The paper examines the relationship of PSEs to winning bids econometrically for an iconic wine widely traded in several Chicago wine auctions, a novel setting for this analysis.

The relationship of winning bids to PSEs differs significantly between two neighboring auction houses, perhaps reflecting differences in how they do business; neither’s PSEs have a straightforward relationship to winning bids; PSEs have an influence on winning bids independent of a lot’s characteristics, reflecting perhaps an anchoring effect; the analysis suggests broad bidding strategies (with counter-strategies implied) and might guide auction house lot selection and ownership if more complete data became available.

The role and reliability of PSEs in auctions of other cultural goods, representing most of the literature, has limited application to auctions of fine wine whose markets differ categorically from those of other cultural goods.

This paper aims to deconstruct the validation process for contemporary art with a fresh take on the components and terminology of this process, here referred to as the art machine.

Existing literature is analysed and key theoretical aspects combined to support the theory that an art machine exists that may process contemporary art for legitimation, sustainability and market success.

Roles played by art professionals and institutions within what is pioneered in this paper as the art machine frequently overlap. Opportunities for success are maximised when and if artists, art schools, galleries, critics, auction houses, museums and collectors manage to work in unison towards the common goal of optimal symbolic and financial value for the contemporary art market.

A clear and intelligible deconstruction of the art machine's interacting components should enable interested agents in both established and emerging art markets to better operate mechanisms towards short‐term marketing objectives and long‐term sustainability within the highly competitive and fluid art environment.

Existing literature recognises layered spheres of activity that may combine for success in an art market seeking increasing symbolic and financial value and sustainability. This article innovatively pictures the dynamic, interlocking mechanisms in this on‐going, one‐way process of turning inconspicuous raw materials into a valued end‐product: this is the art machine.

In order to ensure the continuing expansion and success of electronic commerce, the issue of how to assess product quality of items sold over the Internet must be addressed. The formal literature of microeconomics presents a conceptual framework for this assessment that is applied in the case study presented in this paper. The type of transaction studied is online auction transactions conducted through the popular web site, eBay. Quality issues, as well as other sources of buyer dissatisfaction with electronic purchases, are addressed on eBay through a bulletin board style feedback system by which members of the eBay community may report on various aspects of their eBay transactions. eBay publishes the feedback ratings of each seller as a part of its listing of any item for sale and also disciplines sellers that accumulate too much negative feedback. This would seem to provide buyers with some degree of protection from sellers who are unscrupulous in their claims regarding product quality. The empirical work presented here examines the effectiveness of this system using logistic and ordinary least squares regression, and concludes that at least key aspects of the system offer adequate incentives to sellers to provide accurate representations to buyers regarding the quality of their merchandise.

The process of commercialization of art is often referred to as “monetization,” denoting the use of art as an investment class. I discuss the reverse mechanism, defined as “Monet-ization,” where investment is overlaid with artistic value, and unproven art is imbued with aesthetic qualities. This mechanism is derived from a historical overview of key periods in the history of art, such as the flourishing of new genres in early 17th century Dutch art and the rise of Modern art in the early 20th century. An analysis of original data on the leading art collectors in the world in the period 1990–2015 highlights the tendency for collectors with an “investor” profile and eclectic taste to buy contemporary art. Combining artworks from diverse periods and styles, eclectic personal collections contribute to the conversion of economic into aesthetic value by way of spill-overs across genres and to the attribution by association of “old” value to “new” art. The “Monet-ization” process helps elucidate how paradigm shifts occur in the art world and how innovation survives under conditions of insufficient demand.

The purpose of this paper is to discuss the role and type of records required to support the financial value of artworks and the importance of records for accountability. It looks at the impact of records of provenance, authenticity and investment value and it identifies the impact of the presence, absence and quality of supporting records on the value of an artwork.

Assessing records and their impact on the value of artworks involves investigating whether an artwork without records of authenticity, provenance and investment has the same value as one with such records. It also involves examining how records that provide evidence of an artwork's financial value (prices, auctions, transactions, condition reports, etc.) affect the value of the artwork. What is the impact of records on the value of an artwork? Research was conducted starting with a review of the literature and a small survey of experts.

The results suggest that art records are increasingly important with regard to ownership disputes, insurance claims, accountability for public spending, risk reduction and investment value. Records of provenance, investment and authenticity clearly support the value of artworks, yet the research highlighted a lack of awareness amongst experts about the importance of authenticity. Higher standards, record‐keeping, regular reviews of the artwork and the market and continuous improvements are required to maintain accountability and the value of a collection. Recommendations include regular updates of records, the keeping of records on rights, proof of ownership and long‐term retention.

Further research would be required to clarify whether comparison methods are adequate for the price formation of artworks, to ascertain which records would be required and to establish recognised standards for the content of records. The findings raised awareness of the need for information on the creation of artworks.

The paper concludes by emphasising that it is essential to obtain records for a collection and to keep them secure and updated. It proposes that good record‐keeping reduces risks, improves transparency, supports the value attained and increases in importance as the financial value of art climbs. Many sources and types of record are necessary to support the value of an artwork, especially records of provenance, investment value and authenticity. An artwork with quality records in these categories has higher financial value.