My Kingdom for a Horse (or a Classic Car)

DK Laurs, Luc Renneboog

Research output: Working paperDiscussion paperOther research output

Abstract

This paper investigates the price determinants and investment performance of classic cars comprising various categories starting from veteran cars (built between 1888 and 1907) up to modern classics (built between 1975 and 1990). We examine a sample of 29,000 classic car auction sales conducted globally between 1998 and 2017. A hedonic pricing methodology is used to construct several classic car price indices, which enable a risk-return analysis. Classic cars appreciated annually by 3.37% and 5.63%, respectively in real and in nominal terms before transaction costs. Investments in ‘blue chip’ classic cars (12.50%) and Italian classics (11.28%) generate the highest annual nominal returns. On a risk-adjusted basis, classic cars have outperformed equity and other emotional assets such as art, but underperformed bonds and gold over the past two decades. The risk-adjusted returns on the category of affordable classics are similar to those of equity investments.
LanguageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages54
Volume2018-037
StatePublished - 11 Sep 2018

Publication series

NameCentER Discussion Paper
Volume2018-037

Fingerprint

Car
Equity
Hedonic pricing
Transaction costs
Emotion
Price index
Auctions
Methodology
Risk-return
Assets
Art
Veterans
Risk-adjusted returns
Investment performance

Keywords

  • Alternative investments
  • collectibles
  • emotional assets
  • hedonic regression

Cite this

Laurs, DK., & Renneboog, L. (2018). My Kingdom for a Horse (or a Classic Car). (CentER Discussion Paper; Vol. 2018-037). Tilburg: CentER, Center for Economic Research.
Laurs, DK ; Renneboog, Luc. / My Kingdom for a Horse (or a Classic Car). Tilburg : CentER, Center for Economic Research, 2018. (CentER Discussion Paper).
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Laurs, DK & Renneboog, L 2018 'My Kingdom for a Horse (or a Classic Car)' CentER Discussion Paper, vol. 2018-037, CentER, Center for Economic Research, Tilburg.

My Kingdom for a Horse (or a Classic Car). / Laurs, DK; Renneboog, Luc.

Tilburg : CentER, Center for Economic Research, 2018. (CentER Discussion Paper; Vol. 2018-037).

Research output: Working paperDiscussion paperOther research output

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Laurs DK, Renneboog L. My Kingdom for a Horse (or a Classic Car). Tilburg: CentER, Center for Economic Research. 2018 Sep 11, (CentER Discussion Paper).