NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Prashant Das

Art is meant to be consumed aesthetically. Art is also an emerging investment asset class. Connoisseurs and speculators alike have flocked to auction houses in India to buy paintings to the tune of $100 million a year. IIM-Ahmedabad and Mumbai-based Aura Art came together to jointly develop an art price index that was launched in the BSE auditorium last month titled IIMA – AuraArt Indian Art Index (IAIAI). The quarterly index is based on a hedonic pricing model and should be updated twice a year.

Does art deserve so much attention for a national-level dialogue? Yes, because academic literature is replete with evidence suggesting that art does not only help build new assets and create wealth, but it may also serve as an effective store of wealth. A direct impact of developing art markets reflects in employment creation and tourism development. Yet, some indirect positive outcomes are powerful and long-ranged: Artistic amenities draw good quality talent across industries; artists cross-fertilise creativity across industrial disciplines. In his paper, Currid (2010) shows how a large concentration of artists has made New York the brand it is.