Art Objects Market as an Alternative Financial Investment Market

The purpose of this work is a comprehensive analysis of the art market as a market for alternative financial investments and the construction of an author's econometric price model based on arrays of auction sales of paintings. To achieve this goal, the following research objectives were formulated: • Identify the features of the art market, analyze its structure, and identify the inherent risks of capital investment in the market; • Consider the various approaches used by scientists to analyze the pricing and profitability of works of art; • Identify the main factors affecting the market value of paintings, due to both material costs and the specific influence of the artist's personality; • Create your own auction database using Python's automatic data collection (parsing) technology; • To develop an author's econometric model that evaluates the contribution of each factor to the formation of the sale price of auction lots; • Build an author's price index based on an array of auction auction paintings for 35 years (1980-2015) ; • Compare the dynamics of the resulting index with the dynamics of the S&P500 stock market index. The theoretical basis of this work is the scientific works of foreign and Russian authors. The information base of the study is data from the world auctions Sotheby's, Christie's, Phillips, Bonhams, Heritage, Dorotheum and the website Investing.com . The scientific novelty of the research lies in the application of two interrelated approaches at once: the construction of an econometric model and an index, as well as the use of a larger amount of data than in earlier works. Research methodology: hedonistic regression model and hedonistic price index. The results of the model construction turned out to be ambiguous: some of the hypotheses put forward are not rejected, some have been refuted. Such results can be explained by the subjective side of the art market, not all factors are amenable to econometric assessment. The shocking nature of the artist, changes in fashion and the moods of experts and collectors, media coverage of the auction, the historical and cultural value of the work are among such factors. Nevertheless, recommendations were made to improve the model and index for further research. The constructed art price index proved to be confident when compared with the S&P 500, showing a smaller drawdown during the 2008 crisis, due to the large sample size (more than 30,000 observations compared to 500) and the overall low volatility of expensive paintings.