Date of Award

2018

Document Type

Thesis - Restricted Access (SIA Only)

Degree Name

Master of Arts (MA)

Department

Art Business

First Advisor

Melanie Marino

Abstract

Fine art is becoming an increasingly popular investment tool. As more banks and investment managers develop services specially created to support collectors, art is becoming a straightforward and attractive way to turn an asset into cash. While fine art works can remain safely on the walls of the owner’s home or in a tax haven as they accrue value, collectors can generate liquidity through loans taken out against their collection. Yet lenders and investors alike struggle with the difficulty of pinpointing risk in art investments. Because the only sale data that is available comes from auction sales, which comprise only a fraction of the art market’s total transactions, it can be more challenging (generally speaking) to assess the future potential of the investment than it is do to so for something like a stock. Transactions that take place through a gallery or a dealer are completely private in nature. There are some reasons why it is necessary for certain information to remain confidential, but there may be conditions under which the price doesn’t have to be. Therefore, this thesis explores the current state of opacity in pricing in the art market, the possible incentives for a model in which that data becomes publicly available, and a set of preliminary recommendations on the conditions under which such a model could be implemented and supported.

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