fiddling with value violins as an investment i introduction in this article we analyze the prices of violins using two different datasets one dataset includes 337 observations on repeat sales of the same violins at auction and at dealer sales starting in the mid nineteenth century and the other dataset includes over 2 500 observations on sales of individual violins at auction since 1980 the purpose of this article is to give some indication as to whether violins are a viable alternative investment that might be part of a diversified portfolio and to determine if some types of violins have had higher returns than other types of violins despite the growing discussion of alternative investments in the economics and finance literature the growing number of wealthy individuals funds and syndicates that invest in violins and the interest in violins as a collateralizable asset the only previous study of violin prices published in an academic journal was a study by ross and zondervan 1989 of repeat sales of 17 stradivaris this dearth of academic analysis is most likely due to the difficulty in gathering information on the sale prices of violins compared to real estate and even art the market for high end violins is thin and many violins are sold through dealers rather than auctions resulting in difficulty gathering the data to preview our results overall real returns for the dataset on repeat sales for the period 1850 2009 have been approximately 3 5 real returns to the overall portfolio of individual sales at auction since 1980 have also been about 3 3 not including transaction commissions the price path has been stable with a slightly negative correlation to stocks and bonds the overall returns mask differences in returns between different types of violins it is believed that better violins are sold through dealers rather than through auction houses indeed the real return on dealer sales for 1850 2008 was 4 32 and the real return to violins sold at auction for the same period was 2 86 since 1980 modern italian instruments sold at auction have increased steadily in price relative to old italian instruments sold at auction this article proceeds as follows the violin market is discussed in section ii and in section iii we discuss the data and our estimation methodology in section iv we present our regression results and in section v we interpret our regressions we conclude in section vi ii the market for violins a how the market works fiddles the term used by dealers and collectors to refer to even the finest violins are sold through both auction houses and dealers and also directly from one musician or collector to another the main sellers and buyers of these instruments other than dealers are musicians collectors often foundations and investors individual musicians have used various schemes to purchase a good instrument including borrowing from banks that specialize in loaning funds against musical instruments and assembling syndicates to raise money most collectors both private and institutional loan out their instruments to talented musicians the musician typically pays all insurance and maintenance costs but not a rental fee insurance costs range from about 0 5 to about 2 of the value of an instrument there are also buyers who are interested in purchasing violins primarily as an investment as part of a diversified portfolio these instruments are then also loaned out to musicians who pay insurance and maintenance violins are sold through both auction houses and dealers the relative size of the various markets is very difficult to gauge through conversations with dealers and analyzing our auction data we speculate that auction sales make up between 10 and 20 of the market one advantage of transacting through a dealer is that it is easier to borrow and try out the instrument though auction houses also accommodate a small number of potential buyers in this manner

a random walk through mayfair art as a luxury good and evidence from dynamic models abstract the movement of international art prices in conjunction with other asset prices is preliminary to our understanding whether art is a luxury good it is well known that there are linkages between art market prices and equity prices however less is known about the structure of dependence between these variables and the influence of gold prices and sentiment we analyse art prices at the outset using granger causality and error correction models ecm to capture the long term dynamics between art prices equity markets gold prices and investor sentiment the dataset we use is unique and covers british art prices from 1895 to the present initial results do not give a complete picture of price movements or a fitting description of wealth effects to rectify this we look at short term dynamics in the art market we assume a regime switching model to describe the movement of prices using a threshold variable that drives prices into possibly locally explosive regimes these results indicate a dynamic wealth effect in that high low stock prices lead to subsequent increases decreases in art prices however this approach means that elasticities are now stochastic and we redefine what a luxury good is this is further explored by directly calculating elasticities from our model and its variants to analyse properties of art as a luxury good our threshold approach gives deeper insight into the impact of different market conditions than conventional ecm and cointegration modelling

don t let the easy be the enemy of the good returns from art investments what is wrong with it abstract although geometric hedonic price indexes are widely used in the hedonic literature on non standard investments it is well known that portfolios of assets have values that are related to the arithmetic not geometric average of prices this paper explores the implications of the use of arithmetic hedonic price indexes for art investments log linear predictions are retransformed back to the original scale by performing a modified version of the duan s smearing factor this procedure is illustrated with an analysis of the returns from 10 459 surrealist paintings sold worldwide during the pre crisis period 1990 2007 findings show significant differences between the arithmetic versus geometric price indexes while emphasising the caution that should be exercised in interpreting the hedonic index prices of non standard investments as they are typically computed for academic and business applications

decoupling china s carbon emissions increase from economic growth an economic analysis and policy implications as the world s second largest carbon emitter china has long been criticized as a free rider benefiting from other countries efforts to reduce greenhouse gas emissions but not taking responsibility for its own emissions china has been singled out as one of the major targets at the subsequent negotiations after the kyoto meeting bq analyzing the historical contributions of interfuel switching energy conservation economic growth and population expansion to china s co2 emissions during 1980 97 this article clearly demonstrates that the above criticism is unjustified moreover given the fact that the role of china is an issue of perennial concern at the international climate change negotiations the article envisions some efforts and commitments that could be expected from china until its per capita income catches lip with the level of middle developed countries by emphasizing the it win win strategies these efforts and commitments are unlikely to jeopardize china s economic development and at the same time would give the country more leverage at the international climate change negotiations subsequent to the buenos sires meeting c 2000 elsevier science ltd all rights reserved

art as an investment and conspicuous consumption good ments art is also a consumption good art owners take pleasure in its intrinsic value e g for aesthetic pleasure or as a storehouse of an artist s deftness and to the extent that it is a luxury good they derive additional enjoyment from the signal of wealth that owning a masterpiece transmits it is the mixture of pecuniary and nonpecuniary payoffs to ownership that makes artworks both compelling to purchase and difficult to value i exploit this insight to explain why the measured risk premium of a portfolio of artworks is low compared to other risky assets in a consumption based pricing model an asset s risk premium is a function of the covariance of its returns with agents marginal utility of consump tion agents need to be compensated if the asset pays off in a period of already high utility as a luxury good relative art demand is an increasing function of wealth therefore positive shocks to income increase the demand price and returns to art in periods of high consumption utility implying a high risk premium this intuition is at odds with empirical studies that quantify the average financial returns of paintings relative to more traditional investment vehicles these studies find that art 1 often underperforms relative to equities and bonds while there have been

measuring returns on investments in collectibles this paper considers the question of how to measure and interpret the financial return to investing in collectibles we review various methodologies for creating priced indexes and then discuss studies that explicitly calculate a rate of return to some set of collectibles while most collectibles appear to yield positive real returns the majority embody more risk and yield lower financial returns than stocks other characteristics of collectibles prices such as covariance with other asset prices are also examined

new evidence of the impact of dividend taxation and on the identity of the marginal investor this paper examines the impact of a major change in dividend taxation introduced in the united kingdom in july 1997 the reform was structured in such a way that the immediate impact fell almost entirely on the largest investor class in the united kingdom namely pension funds we find significant changes in the valuation of dividend income after the reform in particular for high yielding companies these results provide strong support for the hypothesis that taxation affects the valua tion of companies and that pension funds were the effective marginal investors for high yielding companies

on pricing the priceless comments on the economics of the visual art market abstract behaviour in the arts is often related to pleasure and imagination however art objects paintings pieces of sculpture and others have been traded on markets for a long time more importantly the place attributed to an artist by contemporary aesthetic judgement more or less depends upon markets we consider here different questions about art objects as commodities markets and prices the returns to art including comments on the comparison of prices of paintings and stock market fluctuations

account for sector heterogeneity in china s energy consumption sector price indices vs gdp deflator abstract a common practice in decomposition analyses is to deflate output indicators to purge the impact of inflation by using a general deflator this practice fails to account for sector heterogeneity and can be hazardous although the general identified patterns are largely correct the calculated magnitudes can be misleading or even wrongly signed instead it is strongly recommended that sector heterogeneity is accounted for by using individual sector price indices for all relevant sectors instead of one general gdp deflator this paper analyzes this advanced decomposition using chinese data and compares to the usual method of using only one deflator it is found that while most differences are only of quantitative quality some show even a qualitative difference furthermore the rising energy intensity in the early 2000s which has been discussed by previous studies vanishes completely

price determinants of aboriginal art and its role as an alternative asset class abstract this paper analyzes auction results for over 4000 paintings by australian aboriginal artists to investigate determinants of prices in the aboriginal art market this is the first financial study of an indigenous art market and hedonic repeat sales and hybrid regression analyses find it shares price determinants with traditional art markets with price premia attached to artist name death painting size leading auction house and winter sale however aboriginal art s unique features significantly affect prices particularly works that use traditional aboriginal media and those with reputation affirming traits an aboriginal art index provides 6 6 annual return standard deviation 17 9 which is comparable to traditional asset classes and superior on a risk adjusted basis returns to aboriginal art are negatively correlated with returns from other assets and so it adds value to a diversified investment portfolio

estimating the marginal abatement cost curve of co2 emissions in china provincial panel data analysis abstract this paper estimates the marginal abatement cost curve macc of co2 emissions in china based on a provincial panel for the period of 2001 2010 the provincial marginal abatement cost mac of co2 emissions is estimated using a parameterized directional output distance function four types of model specifications are applied to fit the mac carbon intensity pairs the optimal specification controlling for various covariates is identified econometrically a scenario simulation of china s 40 45 carbon intensity reduction based on our macc is illustrated our simulation results show that china would incur a 559 623 yuan t roughly 51 57 increase in marginal abatement cost to achieve a corresponding 40 45 reduction in carbon intensity compared to its 2005 level

why did the energy intensity fall in china s industrial sector in the 1990s the relative importance of structural change and intensity change there have been a variety of studies investigating the relative importance of structural change and real intensity change to the change in china s energy consumption in the 1980s however no detailed analysis to date has been done to examine whether or not the increased energy efficiency trend in the 1980s still prevailed in the 1990s this article has filled this gap by investigating the change in energy consumption in china s industrial sector in the 1990s based on the data sets of value added and end use energy consumption for the 29 industrial subsectors and using the newly proposed decomposition method of giving no residual our results clearly show that the overwhelming contributor to the decline in industrial energy use in the 1990s was the decline in real energy intensity indicating that the trend of real energy intensity declines in the 1980s at the 2 digit level was still maintained in the 1990s this conclusion still holds even if we lower the growth rate dramatically in line with the belief that the growth rate of china s gdp may be overestimated

canada s dual class shares further evidence on the market value of cash dividends the canada income tax act of 1971 permitted canadian corporations to create two classes of equity one paying ordinary cash income and the other paying capital gains income cash paying shares have often sold at a premium empirical results indicate that the premium is largely explained by the relative value of the dividends paid and by costs imposed on investors by stock dividend payment and share conversion procedures premiums for a few firms also reflect the relative liquidity of the two classes of shares no evidence exists that investors prefer cash income to equal amounts of capital gains within the last fifteen years over twenty corporations listed on canadian stock exchanges have issued two classes of equity one paying cash dividend income and the other paying capital gains each share is convertible one for one into shares of the other class has equal claim to the issuing firm s profits and receives distributions on the same date as the other class thus each is equally subject to the uncertainty of the firm s operating cash flows these unusual securities are uniquely suited to a study of an important unresolved issue in finance the effect of dividend policy on firm value long 6 and shefrin and statman 11 indicate that claims to cash income may sell for a premium in contrast elton and gruber 3 poterba 9 and other authors present evidence that suggests that capital gains are preferred if markets were frictionless and information were without cost the price history as opposed to the conversion history of canada s dual class shares would be of no use to the study of this issue the actions of traders using the conversion option would ensure that the class a and class b shares of a particular company sell for the same price however positive transactions costs permit differences between prices of the two classes the relative expected value of distributions the relative market value of equal amounts of the two types of distributions and relative

is carbon emission growth decoupled from economic growth in emerging countries new insights from labor and investment effects abstract as emerging countries are both major contributors to global carbon emissions growth and global economic growth the sharp contradiction between economy and carbon emissions has seriously hindered the sustainable development of emerging countries and is not conducive to the realization of global emission reduction targets this work takes brics brazil russia india china and south africa the representatives of emerging countries as an example to investigate the decoupling state between economic growth and carbon emissions and to uncover the driving factors behind these decoupling the results show i russia and south africa have experienced the longest time of strong decoupling indicating that the decoupling in these two countries is better than that in other countries china india and south africa was characterized by expansive coupling weak decoupling and expansive negative decoupling respectively ii the labor effect and investment effect have contributed to the carbon emissions growth in the brics and the reasons for the carbon emissions changes in russia india china and south africa are strongly consistent while brazil has a different performance iii the investment decoupling effect has hindered the decoupling process in russia south africa china and india but has promoted the decoupling process in brazil while the energy intensity effect is the driving force in the decoupling process in most countries finally the policy recommendations for the different decoupling status of each country were put forward

reconsidering psychic return in art investments measuring the psychic return of art investments is a debated issue in cultural economics several works suggest jensen s alpha as a measure of the psychic return since jensen s alpha is defined in the capm framework its uncritical application as a measure of the psychic return may be problematic when the capm hypotheses do not hold applying an opportunity cost framework and the analytical tools of portfolio theory we propose a new psychic return measure which is not affected by the same issues as jensen s alpha psychic return estimates based on our measure are provided for several art market indexes as an empirical application

art as a wartime investment conspicuous consumption and discretion the financial underperformance of art as an investment is well documented in contrast to studies conducted on peace time periods this paper shows that the art market in occupied france during wwii significantly outperformed all alternative investments bonds equities as well as currencies exchanged on the black market other than gold this suggests that art may be a good hedge against low probability disasters the paper further demonstrates that motives to purchase art consumption and investment vary over time in his theoretical model mandel 2009 attributes art s low return to the utility derived from conspicuous consumption in occupied france during wwii conspicuous consumption was impossible for artworks deemed degenerate by the nazis the price evolution of degenerate versus non degenerate artworks confirms the importance of conspicuous consumption in artworks pricing eventually the paper defines the concept of discretion the ability to store a large amount of value in small and easily transportable goods during wartime illegal activities and the risk of being forced to flee the country increased the interest for discreet assets as shown by the better performance of small and thus discreet artworks in comparison to large ones

art investment an empirical inquiry investment in art and especially in paintings by the masters is often considered to be highly profitable particularly in the united states but also in the richer european nations there is an even larger number of investors who believe that buying works of art is not only fun but also a good investment from a purely financial point of view american banks have recently strengthened this trend toward art as an investment by employing art investment counselors thus suggesting that it is a financially rewarding activity to engage in and also suggesting that superior knowledge helps to improve financial success in this market buying and selling art has in fact become an increasingly popular activity since the end of world war ii the auction houses report record turnovers and record prices are paid in increasingly rapid sequence in april 1987 van gogh s sunflowers was sold at christie s london for 39 9 million only to be surpassed in november 1987 by van gogh s irises sold by sotheby s new york for 53 9 million including the auction house s 10 percent commission this last painting had been bought by the seller s mother in 1947 for 84 000 less than 0 5 million in today s money which gives a real rate of return of about 12 percent per year these enormous prices that are paid today for some masterpieces create a widespread belief that the rate of return on such investments is in general and on average very high books devoted to the subject 40 385 27 24 12 215 et seq seem to confirm that the rate of return from investment in paintings at least during the 1950s and 1960s was far greater than the rate obtainable from comparable risky assets in financial markets that the financial profitability in the 1970s and 1980s is believed to be if anything even larger than before is confirmed by many articles in financial and investment newspapers and journals up to now only very few scientific studies of the subject exist but they also have serious limitations the most recent one by baumol 5 covers a period of over 300 years but ends in 1960 two other studies by anderson 1 and stein 42 extend up to the end of the 1960s but do not go any further all three studies are practically limited to transactions by anglo saxon auction

price determination for a collectible good the case of rare united states coins researchers investigating markets for collectible goods such as paintings 1 2 6 12 antique furniture 7 stradivarius violins 14 wine 8 10 and postage stamps 15 often report rates of return to holding collectibles that are both low 2 6 7 8 12 and volatile 6 7 8 12 baumol 2 argues that the market for paintings of noted deceased artists has no long run equilibrium price because the market is characterized by infrequent trades of unique assets which are available in fixed supply his empirical analysis supports the idea that paintings experience unpredictable price changes and highly dispersed rates of return with a mean near zero in contrast anderson 1 reports estimated equations explaining approximately 60 percent of the variation in log prices of paintings based on the size of painting date of sale and a constructed measure of repute of the artist other researchers have examined markets with more frequent transactions and greater substitutability among the goods traded schnitzel 15 finds that year to year changes in prices of postage stamps are predictable based on age of the stamp and quantity printed ross and zondervan 14 report that variations in quality affect prices but not rates of return of stradivarius violins a result which is consistent with user benefits being invariant with respect to quality among markets for collectibles the market for rare u s coins is active and well organized and faces the potential for increased federal regulation annual sales are estimated at 5 billion 16 two wall street brokerages recently have formed multimillion dollar limited partnerships to invest in rare coins and some coins now are traded on electronic exchanges 5 these innovations have come amid calls for increased regulation to guard against fraudulent grading of coins 5 16 a major determinant of the price of a collectible coin is its grade a measure of condition reflecting qualities such as sharpness of features regulators accuse coin dealers of defrauding collectors of millions of dollars annually by assigning higher than warranted grades to the coins dealers sell while downgrading coins they buy for example the federal trade commission ftc

the effect of taxes on the relative valuation of dividends and capital gains evidence from dual class british investment trusts we provide evidence that taxes affect equity valuation by studying british investment trusts having otherwise identical classes of cash and stock dividend paying shares outstanding we study 1969 1982 a period in which there were two dramatic changes in tax policy we find that stock dividend shares which are convertible into cash dividend shares sell at premiums when the tax system favors capital gains and at discounts when the tax advantage of capital gains is reduced after the 1975 elimination of the tax advantage to stock dividend shares we observe that investors convert virtually all stock dividend shares into cash dividend shares the possible existence of tax related dividend clienteles remains a controversy long 1978 poterba 1986 and bailey 1988 study firms with two classes of shares one class paying stock dividends and the other paying cash dividends for evidence of these clienteles and their effects on equity valuation the evidence from these studies is mixed long finds evidence supporting an investor preference for cash dividends over capital gains while poterba and bailey find no evidence of a preference for cash dividends we provide additional evidence on tax clienteles and their effects on equity valuation by studying twelve british investment trusts having one class of shares entitled only to stock dividends or scrip dividends the british term and another class entitled only to cash dividends our study of dual class british investment trusts provides unique insights

capital gains and the rate of return on a stradivarius capital gains and the rate of return on a stradivarius i introduction no name in the annals of violin making has evoked more interest and sense of mystery than that of antonio stradivari during his long lifetime 1644 1737 stradivari probably made about 1 100 instruments with about 700 violins being accounted for currently stradivariuses have been sold in 1986 at auction for over 300 000 fakes are everywhere in spite of the wealth of price data on stradivariuses no systematic economic analysis of this data has been made the central question for this paper is what is the rate of return on a stradivarius rate of return means the annual percentage increase in the price of a stradivarius as in the case of collectables after converting all prices into dollars with 1967 purchasing power the following equation is applied p sub t p sub 0 e sup rt where p sub t is the most recent price and p sub 0 is the preceding transaction price r is the rate of return and t is the number of years elapsing between transaction dates of p sub t and p sub 0 in section ii the rate of return on individual violins for four different periods is determined stradivari developed his skills over time so that each violin is not an identical product regression analysis is used to show how these differences in quality are reflected in differences in price but not in differences in rates of return section iii in section iv the rate of return on a stradivarius from 1803 to 1986 is determined finally in section v other factors are considered that may influence the rate of return on a stradivarius ii the rate of return on individual violins here data on sale prices of individual violins are examined where there is more than one transaction over time in addition each of the sales is assigned to one of four periods periods generally accepted by musicologists such as henley 1961 15 16 as encapsulating stages in stradivari s development data are shown in tables i to iv the amati period 1665 90 stradivari was apprenticed at the age of fourteen in the workshop of the famous nicolo amati where he received on the job training all creations during this period are worked on the pattern of amati table i shows three violins having at least two sales to understand the table consider the first row labeled soames the violin was made by stradivari in 1684 transactions took place in 1907 and 1973 for 8 571 and 15 778 respectively all prices are in 1967 dollars the equation discussed above yields 15 778 8 571e sup r 66 based on this r the rate of return is 0 92 percent in other words the price of the soames violin increased annually at a rate of 0 92 percent typically there is a brokerage fee of 10 percent for individuals 6 percent for dealers to sell a violin at sotheby s or christie s auction house this of course reduces the rate of return on a violin for example to determine the rate of return on the soames after brokerage costs 10 percent was deducted from the 1973 price changing it from 15 778 to 14 201 after eliminating brokerage costs the price increases by 0 77 percent annually the nachez and mercury violins were similarly analyzed the mercury had three different sales so that there are two rates of return the long period 1691 1700 during this period stradivari made numerous changes in his art the scroll is worked in more detail and the varnish is golden yellow stradivari modified the pattern by making the violin a little longer and slightly more narrow table ii shows data on four violins except for the 1933 36 period the falmouth had similar rates of return even though the interval between sales varied significantly seventy four six and forty six years for the first second and fourth transactions respectively

new evidence that taxes affect the valuation of dividends this paper uses british data to examine the effects of dividend taxes on investors relative valuation of dividends and capital gains british data offer great potential to illuminate the dividends and taxes question since there have been two radical changes and several minor reforms in british dividend tax policy during the last 30 years studying the relationship between dividends and stock price movements during different tax regimes offers an ideal controlled experiment for assessing the effects of taxes on investors valuation of dividends using daily data on a small sample of firms and monthly data on a much broader sample we find clear evidence that taxes affect the equilibrium relationship between dividend yields and market returns these findings suggest that taxes are important determinants of security market equilibrium and deepen the puzzle of why firms pay dividends financial economists have long been puzzled by corporate dividend behavior many individual investors should value a dollar of corporate dividends less than a dollar of corporate retentions because the former gives rise to greater tax liabilities corporations however face equal costs of paying out dividends and retaining earnings miller and modigliani 31 demonstrated that in the absence of taxes dividend policy should have no effect on share valuation if dividends are tax penalized however a value maximizing firm should pay no dividends widespread dividend payments to taxable investors are therefore surprising in 1981 dividend tax revenues in the united states were estimated to exceed 20 billion dollars indeed some have interpreted the large volume of dividends paid as evidence against the rational behavior postulates typically used by economists the dividend question has stimulated a large theoretical and empirical literature concerned with the qluestion of investors valuation of dividends in particular the question of how taxes affect the market valuation of dividends has generated considerable controversy numerous studies including auerbach 2 litzenberger and ramaswamy 24 26 morgan 34 and rosenberg and marathe

revisiting baumol s art as floating crap game we show that baumol s conclusion that returns on bonds are higher than returns on paintings is too pessimistic there are segments in the market for which returns are significantly higher than returns on bonds and stocks during long periods of time 20 to 40 years since tastes do change slowly though not in a predictable way this may imply that beating the market is not impossible we also construct price indexes for paintings over the last 200 years

sale rates and price movements in art auctions this paper examines the relationship between sale rates and price shocks in art auctions using data on contemporary and impressionist art we show that while sale rates appear to have little relationship to current prices there exists a strong negative relationship of sale rates to unexpected price shocks which is reminiscent of a phillips curve we estimate an empirical model that suggests that the reserve price is set on average at about 70 of the low estimate

revealing the political decision toward chinese carbon abatement based on equity and efficiency criteria abstract china s economic reform over the past 30 years has allowed the free market to drive economic development however government still plays a key role in the energy sector by allocating energy conservation and emissions abatement how does the government make an equity decision as a tradeoff to market efficiency this is an unanswered question the purpose of this paper is to illustrate the government s preference toward equity and efficiency using the provincial level co 2 intensity allocation data we investigate the political decision that the government made based on the equity and efficiency criteria we find that the equity index plays a more important role than the efficiency index in determining the co 2 intensity target in addition political factors such as social stability are found to be important factors

art as an investment the market for modern prints repeat sales of modern prints at auction are used to estimate a semiannual index of prices for the period 1977 92 as in other studies of art as an investment prints do not compare favorably to traditional financial assets there is substantial noise in auction prices but little or no support for the proposition that some artists command higher prices in certain countries or that masterpieces outperform the market one puzzle is the continuing tendency for prices realized at certain auction houses to exceed those realized at others notably at sotheby s relative to christie s in new york copyright 1993 by american economic association

analysis of electricity consumption in china 1990 2016 using index decomposition and decoupling approach abstract electricity consumption accounts for a significant portion of final energy consumption in countries worldwide and has a close relationship with economic growth this paper explores the factors influencing electricity consumption in china during 1990 2016 using index decomposition analysis and analyses the decoupling status between economic growth and electricity consumption in addition to the influencing factors these analyses are conducted at both national and sectoral levels the results reveal that 1 the economic activity effect was the main driving force increasing total electricity consumption in china while the energy intensity effect hindered it 2 both diversity and aggregation existed at the sector level the power generation chemicals and non ferrous sectors were the top three contributors to increased electricity consumption 3 the change of electricity consumption caused by gdp growth in china showed three decoupling states during 1990 2016 expansive negative decoupling expansive coupling and weak decoupling in particular the energy intensity effect stimulated the occurrence of decoupling 4 industrial sectors played a significant role in decoupling in china while service sectoral electricity consumption showed expansive coupling with its sectoral gdp in recent years

marginal abatement costs of carbon dioxide emissions and its influencing factors a global perspective abstract reducing co 2 emissions has become a major and urgent environmental goal worldwide in this paper we sample the data of 41 regions including 165 countries from 2000 to 2014 and adopt a gravity model to obtain an overview of the global flows of co 2 emissions energy consumption the global economy and capital stock since the beginning of the 21st century we then investigate global technical efficiency reduction potential shadow prices and factors influencing the marginal abatement costs of co 2 emissions based on a quadratic directional output distance function the empirical results show the following 1 the global centres of gravity for co 2 emissions energy consumption and capital stock have accelerated their shift to the asian inland in the 21st century but the global centre of gravity for the economy did not show the same trend 2 global technical inefficiency demonstrates a u shape with a turning point in 2007 average annual total global co 2 emissions could be reduced by 4482 28 mt and the global marginal abatement costs of co 2 emissions are approximately 673 74 697 73 usd t 3 the relationship between economic development and marginal abatement costs is represented by a u shaped curve the world is currently in the climbing phase of this curve implying that controlling co 2 emissions is becoming more costly moreover energy structure industrial structure and co 2 emissions are negatively correlated with marginal abatement costs finally the financial crisis has had a significant effect on marginal abatement costs

the rate of return on investment in wine joyce p jacobsen is wine an investment alternative to stocks and bonds first we review prior studies regarding the pecuniary rate of return to wine and other alternatives to financial assets next we calculate the rate of return to holding red bordeaux wine from 1986 to 1996 using a repeat sale regression finally we contrast the financial performance of wine both on an aggregate basis and for various portfolios to that of other asset classes we conclude that wine does not yield greater returns than financial assets especially when the volatility of returns and transaction costs are taken into account jel d44 g12 c43 investments in art and other collectibles are generally deemed profitable but empirical examinations of the relative attractiveness of noncapital good tangible assets relative to financial instruments have shown that art and other collectibles are not sound investments from a financial point of view there is a large body of literature that calculates the rate of return on alternative asset classes and concludes with few exceptions that nonfinancial assets are not good financial investments however in the case of wine the evidence is mixed collectors often maintain that the pecuniary rate of return on investments in wine is comparable to or exceeds investments in stocks and bonds and economists have not reached a consensus vis a vis the relative attractiveness of wine in this article we consider 1 how investment grade wine compares to other alternative asset classes and 2 whether wine might be a viable investment alternative to stocks or bonds first we consider the results drawn from empirical investigations regarding the relative attractiveness of paintings and other collectibles as investments next we review prior econometric evidence regarding the pecuniary rate of return to wine finally we calculate the return on wine from 1986 to 1996 using a repeat sale regression and contrast wine s financial performance both for an aggregate portfolio and for selected submarkets to that of other asset classes i most investments in collectibles cannot be justified as purely monetary there is a virtual consensus in the economic literature of the arts that financial assets dominate less traditional tangible assets as investments because art and other collectibles embody a compensating differential in the form of a user benefit burton and jacobsen 1999 offer a survey of this literature that finds that most quantitative examinations of the markets for art and other collectibles have concluded that the high risk low return characteristics of noncapital good tangible assets effectively proscribe retaining them as financial investments a seminal study by baumol 1986 for example estimated the real annual rate of return on paintings over the period 1652 to 1961 to be only 0 55 frey and pommerehne 1989 who subsequently extended baumol s data set up through 1987 and expanded it by including sales from more countries also concluded that paintings were relatively unattractive investment instruments yielding only about 1 4 between 1635 and 1949 and 1 6 between 1950 and 1987 on an annual inflation adjusted basis more recent studies have only confirmed that investments in other forms of art and collectibles compare unfavorably to investments in traditional financial assets especially when the rate of return is risk adjusted 1 pesando 1993 for example constructed a price index of modem prints over 1977 to 1992 and estimated that the average real annual rate of return on an aggregate print portfolio was only 1 51 well below the concomitant real return on stocks moreover pesando noted that the risk as measured by the standard deviation of real returns associated with investing in prints was comparable to or even exceeded investments in stocks or long term bonds ii but what about wine

decoupling analysis and environmental kuznets curve modelling of provincial level co2 emissions and economic growth in china a case study abstract guangdong is one of the most representative provinces of china in terms of reflecting how the provincial level co2 emissions dynamically evolve with economic development during the process of industrialisation and urbanisation the present study combines decoupling analysis with environmental kuznets curve ekc modelling to systematically explore the interactions between co2 emissions and economic growth in guangdong from the short to long terms aiming to provide the referential significance of low carbon development to other chinese provinces empirical results indicate that co2 economy interactions in guangdong dynamically changed with time performing an effect of expansive weak decoupling during 1995 2014 and having a potential to achieve a strong decoupling in the long run the decoupling states of various sectors and their contributions to the provincial overall decoupling differed greatly and varied by time and household and service sectors played increasingly important roles overall the decoupling effect of provincial co2 emissions is distinctly affected by the stage of industrialisation and urbanisation renewable energy utilisation as well as low carbon technical progress therefore promoting co2 economy decoupling at the provincial level should be specific to the feature and development reality of various provinces

what is the role of openness for china s aggregate industrial so2 emission a structural analysis based on the divisia decomposition method abstract having observed the weaknesses in previous structural analyses on the role of environmental kuznets curve ekc the author proposes a detailed analysis using a rich data set of provincial level production and so2 emission intensity of 13 industrial sectors the latter represent more than 98 of the total industrial production in each chinese province for the period 1991 2001 through the use of the log mean divisia index decomposition method the variations in province level industrial so2 emissions with regard to the 1990 baseline level are decomposed into the contribution from three components scale composition and technical effects the following analysis seeks to explain how trade openness affects aggregate industrial so2 emission through its impact on the structural determinants for these three components of region specific environmental variations

volatility of price indices for heterogenous goods with applications to the fine art market price indices for heterogeneous goods such as real estate or fine art constitute crucial information for institutional or private investors considering alternative investment decisions in times of financial markets turmoil classical meanvariance analysis of alternative investments has been hampered by the lack of a systematic treatment of volatility in these markets in this paper we propose a hedonic regression framework which explicitly defines an underlying stochastic process for the price index allowing to treat the volatility parameter as the object of interest the model can be estimated using maximum likelihood in combination with the kalman filter we derive theoretical properties of the volatility estimator and show that it outperforms the standard estimator we show that extensions to allow for time varying volatility are straightforward using a local likelihood approach in an application to a large data set of international blue chip artists we show that volatility of the art market although generally lower than that of financial markets has risen after the financial crisis of 2008 09 but sharply decreased during the recent debt crisis

auctions and the price of art the value of most important works of art is established by public auction either directly by an actual sale or indirectly by reference to other sales how the auction system works is thus a critical determinant of how the public s preferences are translated into the evaluation of artistic work the auction system is central in the determination of the incentives for artistic work and the efficiency of the auction system is a key determinant of the cost of creating and distributing works of art this paper contains a review of the burgeoning new research of the last decade that has been designed to shed light on how the art auction system actually works what it indicates about price formation and how well it performs we begin our discussion in section 2 with a short description of the mechanics of the auction system and then organize the remainder of our discussion around two major topics the first topic concerns how auction prices can be used to determine and compare overall price movements within the art market and other markets and the second topic concerns how the auction mechanism influences prices we

carbon dioxide mitigation target of china in 2020 and key economic sectors china proposed a co2 mitigation target in 2020 to deal with anthropogenic global climate change chinese policy makers mainly focus on three factors comprising consumption structure changes energy technology development and new energy increments in addition sectoral co2 reduction is increasingly concerned in the world thus it is significant to investigate integrated impacts of three factors to china s co2 mitigation target as well as to identify key economic sectors for achieving this target in this study energy demand and co2 emission in 2020 are predicted five scenarios are generated to illustrate the contributions of three factors in addition twelve key economic sectors for reducing energy demand and co2 emission are identified from both production and final demand perspectives under integrated impacts of three factors china s co2 intensity per unit gross domestic product in 2020 will decrease by about 43 9 in 2020 than 2005 level in the short term china s co2 mitigation will be highly dependent on energy technology development in the long term it will mainly rely on reshaped consumption structure changes and new energy development in addition china s future policies should focus on 12 identified key economic sectors

god save the queen and her dividends corporate payouts in the united kingdom we examine whether the decline in the number of dividend payers is purely a u s phenomenon or is part of a global trend focusing on the united kingdom a capital market comparable in maturity and sophistication to that of the united states we find that the number of u k firms paying dividends declines from 75 9 to 54 5 after controlling for firm size and profitability we find a declining propensity to pay dividends over the 1998 2002 subperiod we conclude that a shift in catering incentives appears most likely explain these recent changes in u k payout policies

the market valuation of cash dividends abstract this paper re examines the case of citizens utilities a firm with one class of common stock which pays stock dividends and one which pays taxable cash dividends john long s 1978 study of the two shares relative prices suggests that investors may prefer cash dividends to equal sized stock dividends this paper finds that the cash dividend share s ex day price decline is less than their dividend payment stock dividend shares fall by nearly their full dividend the disparity between ex day dividend valuation and the observed prices of the two shares is inconsistent with some explanations of the demand for cash dividends

study on decoupling analysis between energy consumption and economic growth in liaoning province abstract since 1978 liaoning province has experienced spectacular economic growth which has led to more energy consumption the purpose of this paper is to explore the decoupling status between energy consumption and economic growth in liaoning province firstly the generalized lmdi method is used to explore the driving forces governing production energy consumption in liaoning province then the combination of tapio decoupling indicator and generalized lmdi method is utilized to study what the decoupling status occurred in liaoning province and why the decoupling status appeared during the study period only four decoupling status occurred expansive negative decoupling expansive coupling weak decoupling and strong decoupling the energy intensity decoupling effect played a positive role in the appearance of decoupling however the economic structure decoupling effect and investment decoupling effect played a negative role in the appearance of decoupling over the study period the energy structure decoupling effect and labour decoupling effect played a relative small role in the appearance of decoupling

the death effect in art prices evidence from denmark analysing a panel of paintings by danish painters suggests that the conditional life expectancy of the artist at the time of sale has a negative impact on the sale price this is consistent with the idea that artists share some of the characteristics of durable monopolists and that the aging and ultimately the death of the artist represent acceptable forms of commitment not to overproduce in addition interest in an artist s work begins to wane after their death

an analysis of the decoupling relationship between co2 emission in power industry and gdp in china based on lmdi method abstract china predominantly relies on thermal power generation to meet its power requirement which has led to a major increase in total co2 emission and poses a huge threat to the development of power industry in order to reduce co2 emission in power industry and develop economy simultaneously it is necessary to study how to achieve the strong decoupling relationship between co2 emission in power industry and gdp in china however such studies are relatively limited so far thus this paper mainly inquiries the major driving factors on the decoupling during the period of 1985 2016 first the decoupling state in china is quantified by using the tapio decoupling indicator then this paper carries out the decomposition of the decoupling index to explore the driving factors affecting the decoupling by the logarithmic mean divisia index lmdi method and kaya identity equation finally energy consumption in power generation thermal power structure power generation structure transmission and distribution loss electrification energy intensity and economic scale are explored to discuss the decoupling relationship with respect to the co2 emission reduction the results show that the decoupling relationship is in an alternating state between weak decoupling and expansive negative decoupling in 1985 2016 and the influences of seven factors on the decoupling relationship are of difference wherein energy intensity as well as energy consumption in power generation promotes the decoupling while both the economic scale and electrification are the two main factors that inhibit the decoupling the other three factors have relatively weak effects therefore based on the empirical results this paper puts forward some policy suggestions to effectively promote the decoupling between china s electric co2 emission and economic growth

a comparative study on decoupling relationship and influence factors between china s regional economic development and industrial energy related carbon emissions abstract to study the relationship between china s regional economic development and industrial carbon emission reveal the major influencing factors and mechanism of carbon emission change in all regions and provide theoretical evidence for governments to formulate emission reduction strategies and policies big data analysis and the tapio extended model were adopted to quantitatively analyse the decoupling relationship between carbon emission and economic growth in eight major regions of china between 1996 and 2012 logarithmic mean divisia index lmdi was also applied to decompose the main factors affecting carbon emission change in all regions the results show that 1 the proportions of industrial energy related to carbon emissions in central china and the beijing tianjin region decreased year by year while the opposite was the case in coastal areas of northern china furthermore the proportions in other regions basically remained unchanged 2 a weak decoupling relation between industry energy carbon emission and economic growth was found in most regions except in northwest china during the period 1996 2000 southwest china south and north coastal regions during the period 2001 2005 beijing and tianjin during the period 2010 2012 energy consumption decoupling factors exerted a consistent positive effect on industry energy carbon emission decoupling with decoupling impact greater than emission factors 3 the overall level of carbon emission reduction technology in china was low and backwards and limited contributions have been made to economic growth and industry energy carbon emission decoupling development emphases of decoupling should be put on energy saving technology promotion industry structure upgrading and energy structure improvement in the future 4 economic intensity effect has exerted the most powerful positive influence on carbon emissions except in developed areas and the positive effect was weaker than that in other regions

buying beauty on prices and returns in the art market this paper investigates the price determinants and investment performance of art we apply a hedonic regression analysis to a new data set of more than one million auction transactions of paintings and works on paper based on the resulting price index we conclude that art has appreciated in value by a moderate 3 97 per year in real u s dollar terms between 1957 and 2007 this is a performance similar to that of corporate bonds at much higher risk a repeat sales regression on a subset of the data demonstrates the robustness of our index next quantile regressions document larger average price appreciations and higher volatilities in more expensive price brackets we also find variation in historical returns across mediums and movements finally we show that measures of high income consumer confidence and art market sentiment predict art price trends this paper was accepted by wei xiong finance

on the rate of return in the art market survey and evaluation abstract existing estimates of rates of return on single art objects and whole collections are surveyed and critically evaluated the psychic benefits from art are in the few cases they are considered at all derived from the difference to financial returns on other markets this paper discusses determinants of psychic benefits and suggests rental fees and willingness to pay studies as a possible way to analyze and estimate the psychic benefits from art

optimal growth with unobservable resources and learning abstract this paper examines the problem of choosing optimal resource consumption from an imperfectly observable aggregate capital wealth or resource stock which the decision maker learns about over time learning is complicated by the fact that the planner receives information about an object the true resource stock which is a moving target under the assumption that the utility of zero consumption is we show that the optimal policy follows a completely deterministic cautious or minmax policy that assumes the worst in each period and optimizes against that when this model is compared to a model with completely observable wealth levels the following insights are obtained 1 there is over saving 2 investment and output processes are more volatile than consumption and 3 regressions underestimate the risk aversion of agents information about the wealth or stock level is only valuable if it alters the support of the agent s beliefs thus information may be statistically informative yet economically valueless if information changes the support of the agent s beliefs then the optimal solution features an endogenous resource discovery process

the auction market for modern prints confirmations contradictions and new puzzles using a large data set with 80 214 repeat sales we find that the real return on a diversified portfolio of modern prints sold at auctions worldwide averaged a modest 1 51 during the period 1977 2004 we address several issues regarding the performance of modern prints as investments the selection bias arising from the self interest of auction houses the impact of an ever expanding universe of auction houses on investment returns the masterpiece effect or whether more expensive works of art outperform the market as a whole and the differences in returns that arise due to random fluctuations in collector tastes jel z11 g11 g14

comparisons of decoupling trends of global economic growth and energy consumption between developed and developing countries abstract the development of economy in developing countries is expected to contribute mostly to the growth of world energy consumption using environment impact gdp technology igt decoupling model we carry out a comparative study on the decoupling trends of economic growth and energy consumption for both developed and developing countries in past five decades 1965 2015 the results indicate that the decoupling indices of developed countries are superior to that of developing countries the specific performances are 1 the decoupling indices of developed countries are shown to be stable and tend to approximate absolute decoupling 2 the decoupling indices of developing countries fluctuate in the relative decoupling interval on this basis this research employs grey relational analysis gra to explore the reasons resulting in the difference of decoupling indices from the perspective of technical progress industrial structure and economic growth pattern the findings show that in developed countries technical progress factor exerts greatest influence on decoupling indices followed by industrial structure and economic growth pattern in developing countries industrial structure and economic growth pattern have greater impact on decoupling indices than technical progress based on research conclusion this research offers developing countries relevant policy suggestions for energy saving and emission reduction in the future

the collateral value of fine art in this paper we examine the effect of implicit seller reserves on the estimation of value at risk based on historical asset sales data we direct our examination toward how and whether fine art might prove an appropriate form of loan collateral for banks and other financial institutions using a data set of french impressionist paintings brought to auction from 1985 to 2001 we control for the effect of works that are bought in house to construct a distribution of potential sale values that corrects for sample selection bias it turns out that the downside risk surrounding deviations of auction prices from expert presale estimates depends critically on how buy ins are incorporated if downside risk is assessed solely on historical experience with successful auction sales the data appear to support loan to value ratios between 50 and a 100 larger than loan to value ratios that countenance the existence of seller reserves the auction process however is quantifiable and can reveal the necessary risk information required for loan consideration

non parametric frontier approach to modelling the relationships among population gdp energy consumption and co2 emissions abstract in this paper a non parametric approach based in data envelopment analysis dea is proposed as an alternative to the kaya identity a k a impact this frontier method identifies and extends existing best practices population and gdp are considered as input and output respectively both primary energy consumption and greenhouse gas ghg emissions are considered as undesirable outputs several linear programming models are formulated with different aims namely a determine efficiency levels b estimate maximum gdp compatible with given levels of population energy intensity and carbonization intensity and c estimate the minimum level of ghg emissions compatible with given levels of population gdp energy intensity or carbonization index the united states of america case is used as illustration of the proposed approach