Sleeping Beauty

In times of economic uncertainty and a need for alternative investment possibilities, art as an asset class is garnering more attention. This thesis evaluates whether art is a yielding investment, and in what way art functions as a hedge or safe haven. The Dutch auction market is assessed by a unique dataset of over 7300 auction transactions from the Venduehuis in The Hague from 2018 to 2024. Through a hedonic pricing model price determinants are identified, and an art price index is constructed. This index is compared with the AEX index to evaluate the performance of art as a financial asset. The results show that certain characteristics, such as a signature, a mention in literature, the artist's reputation and certain materials, significantly increase the hammer prices at auction. The comparison with the AEX shows that art does not produce a significantly higher or lower yield, nor does it have anti cyclical or protective capabilities. Subgroup analyses confirm this for separate genres, materials and reputation categories. These findings suggest that though art can have objectively valuable characteristics for investors, as an asset class it has limited predictability and risk control. This thesis contributes to the academic debate by empirically analyzing the structural dynamics of price formation in the Dutch art market and offers valuable insights to both art investors and auction houses.