The Hedonic indexes for xix-century, modern and contemporary art on polish auction market

Treating art as an alternative investment one needs to assess the rate of return that can be received from such investment. The rate of return can be derived from price indexes of art, hence the necessity to calculate the hedonic price index of paintings. It was assumed, that hedonic prices for artworks are implicit prices of a set of different attributes that bear some quality. Some of them are of physical, quantitative types, i.e. the surface of the artwork, the majority of them are of non-physical, qualitative types, i.e.: used media and material, the artist’s reputation, the time and place of the sale, etc. These variables must be included in the regression model. The regression coefficients value the characteristics of the artworks, and are used to evaluate the hedonic price index. The purpose of this study is to construct Polish and Czech art price indexes with the use of diversified sets of explanatory variables and, as a consequence, different regression model specifications, and with two different methods of index calculation, i.e. the time dummy variable and characteristics price index method. The study will cover the artworks of most liqiud painters (in terms of a number of sold paintings) and will use transaction data from art auctions in auction houses in Poland and Czech Republic in the years 2007 – 2012. The study sample consists of 2,224 auction records covering the sale of artworks by 22 painters. The evaluation of indexes will allow the comparison of the rates of return on Polish and Czech art markets.