Art pricing in the emerging markets: An empirical analysis

Public opinion have proven to be an essential price determinant that complements many intrinsic features of a good on both developed and emerging markets. In the art market, this form of attitude expression brings the interaction between artists and art connoisseurs to a new level. In this work we investigate the impact of public opinion posted on social media on the prices of artworks from significant emerging markets, using hedonic pricing model with artists' fixed effects. Since art is often considered as a sound alternative investment, we further analyze the interaction between public opinion and collectors' investment intentions. We also consider moderating role of geopolitical risk index, given its importance as a macroeconomic factor for the emerging market, on the relationship between investment intentions and painting prices. We utilize a dataset of 3282 artworks of Russian and Chinese artists sold and find that public opinion significantly affects painting prices in the direction of its valence. We find empirical evidence for the moderation role of investment intentions and geopolitical risk. This study contributes to the research of emerging art markets along with price determinants of artworks.