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FIDDLING WITH VALUE: VIOLINS AS AN INVESTMENT?

Authors

  • KATHRYN GRADDY,

    1. Graddy: Associate Professor of Economics, Brandeis University, 415 South Street MS 021, Waltham, MA 02454. Phone 781-736-8616, Fax 781-736-2269, E-mail kgraddy@brandeis.edu
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  • PHILIP E. MARGOLIS

    1. Margolis: President, Cozio Publishing, Hanflaenderstr. 41, 8640Rapperswil,Switzerland.Phone 41(0)55-210-09-72, Fax 41(0)55-210-09-73, E-mail pmargolis@cozio.com
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    • The authors thank Victor Ginsburgh, Jonathan Hamilton, Ben Hebbert, Tim Ingles, Blake Lebaron, Michael Moses, and Bill Taylor for their comments. The authors also wish to thank Michael Moses and Beautiful Asset Advisors for sharing the updated Mei Moses Art Index. They would also like to thank an anonymous referee for very helpful comments on an earlier version.


Abstract

This paper measures the returns to investing in violins, using two different datasets. One dataset includes 337 observations on repeat sales of the same violins at auction and at dealer sales starting in the mid-nineteenth century, and another dataset includes over 2,500 observations on sales of individual violins at auction since 1980. Overall, real returns for the dataset on repeat sales for the period 1850–2008 have been approximately 3.5%. Real returns to the overall portfolio of individual sales since 1980 have been about 3.3%. The price path has been stable with a slight negative correlation to stocks and bonds. (JEL D44, G11, L82)

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