Art as an investment in a historical perspective

This dissertation studies the price formation mechanisms on the art market. More specifically, it uses historical data to test the impact of several factors on the French art market between 1860 and 1950 and on the Belgian art market between 1945 and 1950. The first paper investigates the link between art dealers’ management and artwork pricing. We study the determinants of profit for an art dealer, from the management of inventories to the identity of the buyers. The second paper deals with macro factors and their influence on prices evolution in the first half of the 20th century French art market. This market was the most important art market until the Second World War but has been omitted from previous studies. We compute the risk-return characteristics in order to see if previous studies were downward biased. Further we analyze the art market in times of crisis: the two World Wars and the Great Depression. The third paper (published in Financial History Review) explores the question of art acting as a capital flight tool by focusing on a very particular episode in history: the monetary reform that occurred in Belgium after the Second World War and drastically reduced the money supply. It also addresses the question of the link between art prices and the money supply.