nep-cul New Economics Papers
on Cultural Economics
Issue of 2023‒04‒10
three papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  1. Biased auctioneers By Aubry, Mathieu; Kräussl, Roman; Manso, Gustavo; Spaenjers, Christophe
  2. Art collectors as venture capitalists By Whitaker, Amy; Kräussl, Roman
  3. Plurilingualism and Brain Drain: Unexpected Consequences of Access to Foreign TV By Damiano Argan and Anatole Cheyssson

  1. By: Aubry, Mathieu; Kräussl, Roman; Manso, Gustavo; Spaenjers, Christophe
    Abstract: We construct a neural network algorithm that generates price predictions for art at auction, relying on both visual and non-visual object characteristics. We find that higher automated valuations relative to auction house pre-sale estimates are associated with substantially higher price-to-estimate ratios and lower buy-in rates, pointing to estimates' informational inefficiency. The relative contribution of machine learning is higher for artists with less dispersed and lower average prices. Furthermore, we show that auctioneers' prediction errors are persistent both at the artist and at the auction house level, and hence directly predictable themselves using information on past errors.
    Keywords: art, auctions, experts, asset valuation, biases, machine learning, computer vision
    JEL: C50 D44 G12 Z11
    Date: 2023
  2. By: Whitaker, Amy; Kräussl, Roman
    Abstract: Employing the art-collection records of Burton and Emily Hall Tremaine, we consider whether early-stage art investors can be understood as venture capitalists. Because the Tremaines bought artists' work very close to an artwork's creation, with 69% of works in our study purchased within one year of the year when they were made, their collecting practice can best be framed as venture-capital investment in art. The Tremaines also illustrate art collecting as social-impact investment, owing to their combined strategy of art sales and museum donations for which the collectors received a tax credit under US rules. Because the Tremaines' museum donations took place at a time that U.S. marginal tax rates from 70% to 91%, the near "donation parity" with markets, creating a parallel to ESG investment in the management of multiple forms of value.
    Keywords: Art investment, venture capital, social impact, portfolio management, tax arbitrage
    JEL: G11 L31 D31 Z11
    Date: 2023
  3. By: Damiano Argan and Anatole Cheyssson
    Abstract: We study how foreign language proficiency affects brain drain by exploiting the exposure of parts of Albania to Italian television in the second half of the twentieth century. At that time, Albania was isolated from the rest of the world, with controlled internal migration and prohibited international migration. As the Italian TV transmitter accidentally reached Albania, Albanians’ exposure to the signal was as good as random conditional on geographical variables. We find that exposure to Italian TV led to a considerable increase in Italian proficiency rates. It also strongly increased the probability of emigration of highly skilled individuals, but did not affect other skill groups. We rule out other channels through which TV might affect migration and interpret our findings as the effect of foreign language proficiency on brain drain.
    Keywords: Migration; Media; International Migration; Language.
    JEL: O15 L82 F22 Z13
    Date: 2023

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