Events

Art in Times of Crisis

Is art a haven in times of political or financial crisis? To answer this question, Yuexin Li of Renmin University of China and her co-authors trace the long-term performance of the UK art market during world wars, economic recessions, financial crises, inflationary periods, and changes in monetary policy by digitalizing historical auction archives to construct art price indices from the early 20th century onwards.

It is shown that annual art auction value grew, in real terms, more than seven-fold over the past century, with the arithmetic annual real return and risk amounting to 3.6% and 20.1%, respectively. Art returns plummeted at the onset of wars, but in the later years of war periods, returns became positive and outperformed equities, suggesting that art served as a hedge against political uncertainty. During war times, smaller and thus transportable paintings obtained higher returns.

Art, on the other hand, was sensitive to economic and financial crises, with the largest slumps occurring in the post-WWI recession, the Great Depression, the oil crisis, the recessions of the early 1980s and early 1990s, and the Great Recession. 1931 (-63%) and 1991 (-37%) show by far the largest declines in art returns when the largest art market bubble burst.

In this Quantitative History Webinar, Yuexin Li will highlight changes in art preferences for specific paintings by size, art school, art objects’ liquidity, and artists’ nationalities during different crises. The evidence suggests that art entered a broad optimal asset portfolio in both non-crisis periods and during war times, but the same did not occur during financial crises and economic recessions.

Yuexin’s co-authors: David Géraldine (Bibliotheca Wittockiana, Brussels), Kim Oosterlinck (Université Libre de Bruxelles) and Luc Renneboog (Tilburg University)

Discussant: Zhiwu Chen, Chair Professor of Finance, HKU Business School

Live on Zoom on February 16, 2023
16:00 Hong Kong/Beijing/Singapore
08:00 London | 17:00 Tokyo | 19:00 Sydney

The Quantitative History (QH) Webinar Series aims to provide researchers, teachers, and students with an online intellectual platform to keep up to date with the latest research in the field, promoting the dissemination of research findings and interdisciplinary use of quantitative methods in historical research. The QH Webinar Series, now entering its fourth year, is co-organized by the International Society for Quantitative History, HKU Business School, and Hong Kong Institute for the Humanities and Social Sciences. The Series is now substantially supported by the Areas of Excellence (AoE) Scheme from the Research Grants Council of the Hong Kong Special Administrative Region, China (Project No. [AoE/B-704/22-R]). 量化歷史網上講座系列由香港大學陳志武和馬馳騁教授聯合發起，旨在介紹前沿量化歷史研究成果、促進同仁交流，推廣量化方法在歷史研究中的應用。本系列講座由國際量化歷史學會、香港大學經管學院和香港人文社會研究所全力支持和承辦。從2023年開始，系列得到中國香港特別行政區研究資助局卓越學科領域計劃的重要資助 (項目編號[AoE/B-704/22-R])。

Conveners:
Professor Zhiwu Chen
Dr. Chicheng Ma