A MODEL FOR PRICING THE ITALIAN CONTEMPORARY ART PAINTINGS AT AUCTION

This paper aims to model the auction prices of Italian contemporary art paintings. The contribution to the existing literature is twofold concerning both the methodological and the conceptual aspects. From the former point of view, we use the two-stages Heckit model which allows us to take into account the sample selection bias deriving from the “buying” risk, that affects transactions at auction. From the latter point of view, we have found that some sale characteristics such as auction house prestige and year of sale, are more important than the physical aspects of the paintings. Moreover, some artistic characteristics, the artist’s name and their living status are also relevant. The whole analysis is carried out after creating a new dataset of 2817 transactions which took place at the most important auction houses between 1990 and 2006.