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Erdal Atukeren and Aylin Seçkin
''Art and the Economy: A First Look at the Market for Paintings in Turkey''
( 2006, Vol. 26 No.3 )
We investigate the relationships between the return on investments in paintings and other financial investments in Turkey. To this aim, we estimate a hedonic price index for a portfolio of Turkish painters. We find that investing in the market for paintings is a viable alternative even in an environment of high inflation and large macroeconomic volatility. The portfolio under investigation yielded a small but positive real return. Still, stock market returns are higher than the returns in the art market. Furthermore, we find a rather high correlation between stock returns and art market returns. However, the returns to investing in paintings are negatively correlated with the returns on traditional investment alternatives in a developing country context, such as foreign exchange, gold, and bank deposits. Hence, there might exist some room for portfolio diversification. Nevertheless, the time horizon of the investments is a key factor especially in portfolios involving art objects.
JEL: Z1 - Cultural Economics; Economic Sociology; Economic Anthropology: General
Manuscript Received : Sep 05 2006 Manuscript Accepted : Sep 05 2006

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