Abstract
The market for modern Indian art is an emerging art market, having come into a proper existence only in the late 1990s. This market saw tremendous growth in its initial years, then a downturn that started around 2007–2008. Using data from auctions conducted by a major Indian art auctioneer, we estimate via hedonic regression a price index for paintings and drawings by Indian artists sold during 2000–2013. We are able to thus estimate a rate of return on Indian art as an investment and also shed light on what drives the price of a painting in the Indian market.
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Notes
See for instance papers by Anderson [1974], Frey and Pommerehne [1989], Buelens and Ginsburgh [1993], de la Barre et al. [1994], Chanel et al. [1994], Czujack [1997], and Renneboog and Spaenjers [2013].
Reddy and Dass [2006] focus on a single Saffronart auction in December 2004 for 107 paintings to understand within-auction price dynamics. Their work complements ours, since we focus on trends in auction prices over time.
Having online auctions allows Saffronart to tap into the non-resident Indians (NRIs) consumer base. While about 60 percent of Saffronart’s buyers are based in India, NRIs constitute the bulk of the remaining 40 percent. More generally, online auctions are a growing trend in the art world, and several international art auction houses have experimented with this format in recent years [Gameran and Crow 2011].
We chose INR for the regressions since the majority of Saffronart’s buyers are either based in India or have substantial financial assets located there.
In the case of contemporary painters, it is less clear who the established painters in the coming years will be.
Since all contemporary artists in our data set are still alive, this coefficient is estimated only in the modern artists sample.
In general, art prices were booming globally during 2002–2007. Renneboog and Spaenjers [2013] report an annual real growth in Western art prices of 13.65 percent during this time.
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Acknowledgements
We thank Saffronart COO Nish Bhutani and his team members Vipin Jain, Punya Nagpal, and Yamini Telkar for their help with the data and their insights about the Indian art market. We appreciate advice and feedback from Tobias Pfutze, Eesha Phanse, Shashank Saini, and the audience and discussants at the Southern Economic Association annual meetings. Yiqin Chen provided competent research assistance. Research support from the Albert Rees fund and the H.H. Powers grant at Oberlin College is gratefully acknowledged.
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Hawkins, J., Saini, V. Returns on Indian Art during 2000–2013. Eastern Econ J 42, 302–310 (2016). https://doi.org/10.1057/eej.2015.39
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DOI: https://doi.org/10.1057/eej.2015.39