nep-cul New Economics Papers
on Cultural Economics
Issue of 2020‒07‒20
two papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  1. Art as an Asset: Evidence from Keynes the Collector By Chambers, David; Dimson, Elroy; Spaenjers, Christophe
  2. Terror and Tourism: The Economic Consequences of Media Coverage By Besley, Timothy J.; Fetzer, Thiemo; Mueller, Hannes Felix

  1. By: Chambers, David; Dimson, Elroy; Spaenjers, Christophe
    Abstract: The risk-return characteristics of art as an asset have been previously studied through aggregate price indexes. By contrast, we examine the long-run buy-and-hold performance of an actual portfolio, namely, the collection of John Maynard Keynes. We find that its performance has substantially exceeded existing estimates of art market returns. Our analysis of the collection identifies general attributes of art portfolios crucial in explaining why investor returns can substantially diverge from market returns: transaction-specific risk, buyer heterogeneity, return skewness, and portfolio concentration. Furthermore, our findings highlight the limitations of art price indexes as a guide to asset allocation or performance benchmarking.
    JEL: B26 C43 G11 G12 G14 Z11
    Date: 2020–01
  2. By: Besley, Timothy J.; Fetzer, Thiemo; Mueller, Hannes Felix
    Abstract: This paper studies the economic effects of news-coverage of violent events. To do so, we combine monthly aggregated and anonymized credit card data on tourism spending from 114 origin countries and 5 tourist destinations (Turkey, Egypt, Tunisia, Israel and Morocco) with a large corpus of more than 446 thousand newspaper articles covering news on the 5 destination countries from a subset of 57 tourist origin countries. We document that violent events in a destination are followed by sharp spikes in negative reporting at origin and contractions in tourist activity. Media coverage of violence has a large independent effect on tourist spending beyond what can be accounted for by controlling for the incidence of violence. We develop a model in which tourist beliefs, actual violence and media reporting are modelled together. This model allows us to quantify the effect of violent events and reporting.
    JEL: D74 D83 F14 F15 H12 L82
    Date: 2020–01

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