The role of emotional return in art investments

Abstract

The thesis project aims to analyse the role of “emotional return” in investment decisions in the art market, alongside aspects of return and risk. Quantifying the so-called “psychic/emotional return” in the context of art investment has been and still remains a challenge in the art market. The literature offers many studies and insights into the profitability of art investments; however, the focus is primarily on return, risk, and portfolio diversification. The decision to invest in art, however, suggests the existence of an additional variable - psychic return - as an important driver of investors’ decisions. Therefore, a deeper understanding of psychological and behavioural aspects is necessary, through alternative and hybrid models that integrate aesthetic return into the evaluation of art investment performance and portfolio optimization problems. Although some methods have been used in the literature to quantify emotional return, the subjective nature of art investment makes it very difficult to converge on a single result. The concluding section of the thesis involves conducting interviews with professionals in the art market, including experts in art advisory and wealth management, to further explore the role of emotional return in investment decisions in the art market.