The determinants of investment in collectibles: A probit analysis

This study investigates differences that might exist between personality, demographic and financial characteristics of owners and nonowners of collectibles. The merits of an investment in collectibles have often been discussed in business periodicals and popular literature (7, 12, 13). Several factors have contributed to a recent increase in interest in collectibles as an investment. One such influence has been the high rate of inflation in recent years. Another has been the broadening of types of investments considered prudent under the “Prudent Man” rule, which requires fiduciaries to make only those investments which would confirm to the standards of a prudent man. Historically, this rule has been interpreted as precluding investment in assets such as art, antiques, or other collectibles. But recently, because of a number of factors, including regulations issued under the Employee Retirement Income Security Act (ERISA), investments in asset such as collectibles have increasingly been regarding as prudent (9). Academic literature has generally neglected the study of collectibles as investments. An exception is Stein (14) who analyzed paintings as an investment within the context of modern capital market theory. Stein concluded that the investment performance of paintings was similar to that of other investments of comparable risk.