Art Market Analysis for Art Valuations and Art Indexes

Art Market Valuation & Art Appraisal

AFP provides art valuations of paintings, artists and segments, based on databases of private and public art market transactions. Art indices are calculated using hedonic regressions (see also Publications & News). The hedonic function analyses the relationship between certain aspects, attributes, characteristics, of a product or service and its price, by applying regression techniques. As a result, it is possible to measure the changes in quality and price separately over time. Since each work of art is unique, this is a decisive advantage over average calculations. The hedonic regression method is also used for other goods which are heterogeneous like housing, wines, used cars and the like. 
The art index reflects the actual price trend for the respective segment or artist. The method is applied today to a number of official price statistics, like e.g. consumer price indices in the USA and Germany, or real estate indices. Based on our art market indices, the respective rates of return and the risks of investing in a single art segment or individual artist are calculated.

In addition, our art market indices are adjusted for inflation and currency fluctuations. The latter may have a big impact on art price developments, e.g. in the case of transactions in the USA which are then converted into Euros or Swiss Francs.
Since art investments are very strongly linked with emotions, and financial considerations are not necessarily the top priority, the hedonic method of evaluating individual works of art, like e.g. Paintingpricing with the Painting Calculator, delivers primarily indicative painting prices. Thus, calculations based on historic data of art market transactions do not guarantee at all future real purchasing or selling art prices or returns thereof. Furthermore, the availability of statistically significant individual art market research reports is restricted in our database by means of a specified minimum number of art market transactions per artist. The liquidity and transparency of art markets is considerably inferior to those of financial markets.


Art Prices & Painting Pricing

The Painting Calculator allows you to evaluate individual paintings, i.e. to do online art valuations. The relevant artists and art prices can be found in the artist database; the number of artists included will be increased in updates. Based on the data entered in the input screen which contains approximately 10 criteria, you receive an estimated art price range, within a margin of +/- 10%, for a particular painting at present value and the calculated return rate used. If you are unable to find the desired artist in the artist list, we offer individual price estimates within 48 hours. The fees for more extensive estimates, e.g. entire collections or estimates for insurance purposes are priced accordingly (see Subscription).


Artist Index & Artist Performance

Upon selecting an artist you are given an artist price index over a certain time period; the art appraisal. Based on this index, the corresponding annual rate of return and risk are determined for an art investment in that particular artist. In addition, we provide the average overall return rate for the entire period. If the desired artist is not listed, we can calculate individual artist indices. However, reliable individual performance measurement is only possible if sufficient transaction data exists in our database for the artist in question or the desired category. Our art market database is continuously updated and expanded.


Art Market Index & Category Performance

On selecting an art market category - a specific art index and an art price segment or an art school - you will get an art market price index over a certain time period. As a comparison you can also draw on benchmark indices of common asset classes like financial securities and real estate. Based on these art indices, the corresponding annual rate of return, the risk and correlations are determined for an investment in the appropriate segment. In addition, we provide the average overall return rate for the entire period. If the desired segment is not listed, we offer to generate individually calculated art market indices.


Art Market, Artist Indexes & Benchmarks

The art market and artist indexes from our art market database are available for individual online benchmarking. We provide various categories of benchmarks, including: financial indices (equity and bonds), commodities, real estate, and macroeconomic indicators (inflation and growth rates). Our members use these numbers to verify the performance of their art investments; either in artists or in art market portfolios. The performance indicators includes the risks, return rates, Sharpe ratios, diversification benefits, and asset protection of art investing.