The Art Market in the European Union

There is a broad discussion in the literature concerning various aspects of art as an investment, where the return on art assets has been of special interest, but so far there is little achievement in the analysis of the performance of art markets in various countries of the European Union. The objective of this article is to make an attempt to fill the gap in the research of the Polish emerging art market as seen from this perspective. The objective is achieved by calculating quarterly hedonic price indices and rates of return using 1708 auction records covering the sale of paintings by 30 painters obtained from Polish art websites at www.artinfo.pl and www.agraart.pl. The estimated price index enables us to analyze the relationship of this index and the rate of return with European (i.e. French and British) art indices and rates of return. This study shows that returns on Polish art averaged 5.51 % in nominal terms over the period 2008-2012 with a standard deviation of 8.34 %. It shows that over this period the art market in Poland proved more profitable and more variable in comparison with European art markets.