Art investment in South Africa: portfolio diversification and art market efficiency
- Botha, Ferdi, Snowball, Jeanette D, Scott, Brett
- Authors: Botha, Ferdi , Snowball, Jeanette D , Scott, Brett
- Date: 2016
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/64794 , vital:28601 , http://www.dx.doi.org/10.17159/2222-3436/2016/v19n3a4
- Description: Art has been suggested as a good way to diversify investment portfolios during times of financial uncertainty. The argument is that art exhibits different risk and return characteristics to conventional investments in other asset classes. The new Citadel art price index offered the opportunity to test this theory in the South African context. Moreover, this paper tests whether art prices are efficient. The Citadel index uses the hedonic regression method with observations drawn from the top 100, 50 and 20 artists by sales volume, giving approximately 29 503 total auction observations. The Index consists of quarterly data from the period 2000Q1 to 2013Q3. A vector autoregression of the art price index, Johannesburg stock exchange all-share index, house price index, and South African government bond index were used. Results show that, when there are increased returns on the stock market in a preceding period and wealth increases, there is a change in the Citadel art price index in the same direction. No significant difference was found between the house price index and the art price index, or between the art and government bond price indices. The art market is also found to be inefficient, thereby exacerbating the risk of investing in art. Overall, the South African art market does not offer the opportunity to diversify portfolios dominated by either property, bonds, or shares.
- Full Text:
- Date Issued: 2016
- Authors: Botha, Ferdi , Snowball, Jeanette D , Scott, Brett
- Date: 2016
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/64794 , vital:28601 , http://www.dx.doi.org/10.17159/2222-3436/2016/v19n3a4
- Description: Art has been suggested as a good way to diversify investment portfolios during times of financial uncertainty. The argument is that art exhibits different risk and return characteristics to conventional investments in other asset classes. The new Citadel art price index offered the opportunity to test this theory in the South African context. Moreover, this paper tests whether art prices are efficient. The Citadel index uses the hedonic regression method with observations drawn from the top 100, 50 and 20 artists by sales volume, giving approximately 29 503 total auction observations. The Index consists of quarterly data from the period 2000Q1 to 2013Q3. A vector autoregression of the art price index, Johannesburg stock exchange all-share index, house price index, and South African government bond index were used. Results show that, when there are increased returns on the stock market in a preceding period and wealth increases, there is a change in the Citadel art price index in the same direction. No significant difference was found between the house price index and the art price index, or between the art and government bond price indices. The art market is also found to be inefficient, thereby exacerbating the risk of investing in art. Overall, the South African art market does not offer the opportunity to diversify portfolios dominated by either property, bonds, or shares.
- Full Text:
- Date Issued: 2016
Festival fringe production and the long tail
- Authors: Snowball, Jeanette D
- Date: 2016
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/68855 , vital:29332 , http://www.econrsa.org/node/1170
- Description: Publisher version , In the past 15 years, there has been a worldwide proliferation of arts festivals, including so-called "fringe" festivals, which encouraged more experimental and avant-garde productions. While fringe festival productions had the potential to generate significant income for producers, their aims were primarily related to artistic innovation and it is well known that putting on a fringe show is highly unlikely to provide financial gain for most producers. This is what is referred to in statistics and marketing as a "long tail" distribution, in which a minority of producers in a particular market earn the vast majority of industry income. However, for individual producers of live theatre, such a distribution represents high risks and potentially large financial losses. This article uses producer data from two different fringe festivals in South Africa to explore determinants of ticket sales and box-office income. Included in the analysis is a consideration of the impact of genre and pricing strategies on the probability (Logit model) of shows being in the top 10%, 30% and 50% of best-selling and earning productions. Results support the long tail hypothesis.
- Full Text:
- Date Issued: 2016
- Authors: Snowball, Jeanette D
- Date: 2016
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/68855 , vital:29332 , http://www.econrsa.org/node/1170
- Description: Publisher version , In the past 15 years, there has been a worldwide proliferation of arts festivals, including so-called "fringe" festivals, which encouraged more experimental and avant-garde productions. While fringe festival productions had the potential to generate significant income for producers, their aims were primarily related to artistic innovation and it is well known that putting on a fringe show is highly unlikely to provide financial gain for most producers. This is what is referred to in statistics and marketing as a "long tail" distribution, in which a minority of producers in a particular market earn the vast majority of industry income. However, for individual producers of live theatre, such a distribution represents high risks and potentially large financial losses. This article uses producer data from two different fringe festivals in South Africa to explore determinants of ticket sales and box-office income. Included in the analysis is a consideration of the impact of genre and pricing strategies on the probability (Logit model) of shows being in the top 10%, 30% and 50% of best-selling and earning productions. Results support the long tail hypothesis.
- Full Text:
- Date Issued: 2016
The effectiveness and impacts of subsidies to film industries
- Collins, Alan, Snowball, Jeanette D
- Authors: Collins, Alan , Snowball, Jeanette D
- Date: 2016
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/68511 , vital:29273 , https://www.southafricanculturalobservatory.org.za/
- Description: Publisher version , Conference paper presented at the South African Cultural Observatory, First National Conference: Counting Culture, The Cultural and Creative Industries in National and International Context, 16-17 May 2016, The Boardwalk International Convention Centre, Nelson Mandela Bay.
- Full Text:
- Date Issued: 2016
- Authors: Collins, Alan , Snowball, Jeanette D
- Date: 2016
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/68511 , vital:29273 , https://www.southafricanculturalobservatory.org.za/
- Description: Publisher version , Conference paper presented at the South African Cultural Observatory, First National Conference: Counting Culture, The Cultural and Creative Industries in National and International Context, 16-17 May 2016, The Boardwalk International Convention Centre, Nelson Mandela Bay.
- Full Text:
- Date Issued: 2016
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