The inflation hedging property of art: evidence from the US, UK and France

This study uses a nonlinear autoregressive distributed lag (NARDL) model to investigate the potential of art as a hedge against inflation. The analysis is based on quarterly data of art price index and consumer price index from 1998 to the second quarter of 2023 in the United States, the United Kingdom, and France. The NARDL model can estimate the short- and long-term impacts of positive and negative shocks on art prices by decomposing the change of the Consumer Price Index (CPI) into positive and negative components. The findings indicate clear asymmetry in the influence of inflation on art prices. Furthermore, in France, art is an excellent tool to hedge inflation in the long term, which may be attributed to the size of French art market, cultural traditions, and art market policies. However, in the United States and the United Kingdom, art does not provide a hedge against inflation, whether in the short or long term.