Old master paintings, export veto and price formation: An empirical study

Abstract

In this paper, we focus on the institutional setting where Old Masters'Paintings (OMP) markets transactions are carried. We develop a preliminary attempt to embody legal provisions in econometric, hedonic pricing models. We consider a particular regulation applicable only in Italy, the "export veto" for art objects that are particularly relevant for the national cultural patrimony. We proxy such legal provision in order to include it in the statistical analysis and to check whether it affects the OMP price differentials between pre-auction estimated price and post-auction hammer price. Preliminary results show that the price differential is affected by the legal variable, therefore suggesting that the country's institutional framework plays an important role in price dynamics. © 2009 The Author(s).