THREE ESSAYS IN APPLIED MICROECONOMICS: ART PRICING, ART MUSEUMS AND ART AUCTIONS

Abstract

Based on the field of cultural economics and economics of the visual arts, this dissertation focuses on microeconomics application to the market for fine arts. The first chapter investigates the relationship between the market value of a painting and the attributes of the painting and its artists. The artist's attributes are represented by the primary style and primary object of the artist significantly used in the artist's paintings. The results of the hedonic regression confirm that the market values the primary style and objects. The second chapter focuses on art museums and analyzes the effect of different types of art museums in terms of the admission policies on state residents and art visits in U.S. The study concludes that while free art is attractive for local participation, it might have a negative impact on tourist attendance. The results also show the importance of location for art museums. Finally, the third chapter analyzes premium rates and art investment by using auction sales data on impressionist and contemporary paintings. The study shows that paintings which are close to limit hammer prices tend to end up with high premium rates and low hammer prices. The art indexes that are captured from hedonic regressions show how investment on art changes with market in London and New York. Investment on impressionist and contemporary art between 2000 and 2012 in New York was relatively less risky than the market. However, investment on impressionist and contemporary art in London has no evidence for a risky investment.