Sculpture as an Alternative Investment: An Analysis of Price Dynamics between Sculpture and Equity and Bond Markets

Abstract

This article analyzes the dynamic relationship between the international sculpture market and the traditional financial investments during the 1985–2011 period. Three international sculpture price indexes are constructed using an ordinary least squares (OLS) hedonic pricing method as well as a quantile hedonic pricing method. Cointegration tests show that, price development in the sculpture market does not move together with either equity prices or government bond prices in the long run. Furthermore, cointegration is only detected when gross domestic product (GDP) per capita is considered. When the lower-end and upper-end sculpture market segments are looked at separately, the latter exhibits long-run interdependencies with the international painting market, while the former does not. Granger-causality tests reveal that sculpture prices, in general, are Granger-caused by GDP per capita. In the longrun, however, GDP per capita does not Granger-cause the upper-end segment. Moreover, the Granger-causality tests indicate that sculpture price developments neither follow nor are followed by equity price movements.