Saturday, October 6, 2012

Delving into economics of art ownership

A cultural economist and investment analyst by profession, Clare McAndrew is considered a leading expert on the highly specialized subject of economics of art ownership. She holds a PhD degree (economics) from Trinity College, Dublin, where she later taught economics for a few years before leading several research projects for the UK Arts Council, apart from conducting detailed studies on the aftereffects of regulation and taxation on the art market.

After a brief association with Kusin & Company (specializing in visual arts investment), in 2005 she came back to Europe, and pursued her research before conceptualizing Arts Economics in Dublin. The institution works with a solid network of academic researchers and private consultants in offering research & consulting services to the art trade and wider financial sector globally.

‘Fine Art and High Finance: Expert Advice on the Economics of Ownership’, an elaborate research volume edited by her deals with the various finer elements of art investment and the factors that affect it – specific and generic, broader and individual issues - that come into play. Her earlier book, titled ‘The Art Economy’ (2007), acted as a guide to the visual art market for aspiring investor. Taking a cue from it, ‘Fine Art and High Finance’ further updates and elaborates on the key topics covered in the earlier volume.

In it a team of scholars from different domains along with the chief author-editor delve into some of the most complex financial and other issues ahead of art investors, such as appraisal and valuation; securitization and taxation; and insurance. The document does not try to predict how the market will shape up in backdrop of the financial crisis, which greatly impacted contemporary art, still in the throes of some readjustment.

Instead, after a quick glance at the modern art market history, the book refers to the market’s main players and current structure before moving to its economics. The fundamental point that Clare McAndrew makes is: “One of the most crucial economic features of the art market is, it’s primarily supply-driven ... increased demand ... cannot increase supply necessarily... and instead will only elevate prices.”

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