Influence of the aesthetic and investment factors on the paintings pricing model

Student: Khusainova Karina

Educational Programme: Bachelor

Year of Graduation: 2014

This diploma work is dedicated to the research of factors influencing price of “mass market” paintings.Firstly, it’s crucial to define correctly what’s meant under “mass market” in this work. The market of art is of high degree of inhomogeneity: different principles seem to be relevant for high and low price segments for paintings. Thus, to analyze any issues in this area and to obtain good results, it is better to narrow the area of research. In terms of consumer, mass market is more representatve as the audience of  high price paintings auctions is very specific. So, mass market paintings were chosen as the main object of study.Secondly, there are some peculiarities of paintings as a consumer good which need to be taken into account. The most important peculiarity is about two main motives for buying a painting: ‘aesthetic’ and ‘investment’ ones. “Aesthetic” factor stands for visual parameters of a painting, such as colors used, subject depicted, degree of color variation etc. These parameters are meant to influence visual perception of the painting. “Investement” factor stands for some objective parameters of a painting, such as size of work, author’s characteristics, date of creation etc. The influence of listed factors on the investment attractiveness is commonly recognized and proved in the number of papers.The practical part of the diploma work actually is based on the analysis of Ebay data. The main aim of this empirycal analysis whas to show whether there is a significant influence of aesthetic factors on the painting price or not. Econometric tools being applied to this study are OLS and Heckman models. Both models in differrent specifications showed the existence of significant dependency of price on aesthetic characteristics (style, subject, RGB color structure). The results are reliable as they are stable within different model specifications.So, the main conclusion of this diploma work is that there is a significant influence of aesthetic factors on the decision of mass market consumer to buy a painting.

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