Is there a bubble in the art market?

The record-breaking prices observed in the art market over the last 5 years raise the question of whether it is an ongoing boom or whether we are experiencing a speculative bubble. Given the difficulty to determine the fundamental value of artworks, we apply a right-tailed unit root test with forward recursive regressions (SADF test) to detect explosive behaviors directly in the time series of six different art market segments for the period from 1970 to 2014. We identify two historical speculative bubbles and find an explosive movement in today's Impressionist and Modern, Post-war and Contemporary, American, and Old Masters fine art market segments. (C) 2015 Elsevier B.V. All rights reserved.