The Economist gets an F in… economics.

From this week’s Economist article “Going, going, up,” a paint-by-numbers rehash on the rising market:

Among the anxious are Jianping Mei and Michael Moses of New York University, who compile an index which shows that prices of post-war and contemporary art have done better than the S&P 500 Total Return index over the past ten years.

Once again, a journalist fails to specify that the Mei Moses index only tracks art that was auctioned twice. This is a very select group of artworks, and it’s thus a crucial point. In fact, when I interviewed Moses for my New York magazine feature on the art market last spring, he was anguished by such mistakes, saying: “As an economist, that bothers me. Because I have no idea what the non-auction market is doing, since there’s no transparency of prices.” Well, I have an idea: If you tracked down all the art sold during that ten-year period and measured its value now, the returns would be pitiful, because 75 percent would be totally illiquid.

I’d excoriate the writer, but since the Economist is un-bylined, maybe we can just suggest a remedial course in reading economic studies. Seriously, if people writing about finance were this loose with the data, they’d get sacked. But, hey, it’s only the art market – why bother being accurate?

1 thought on “The Economist gets an F in… economics.”

  1. At business school twenty years ago I did an informal survey of a week’s issues of a certain well known European financial newspaper. Each student was asked to find a piece on a subject or market they knew well and analyse the article for accuracy. At the end of the week everyone had found an article on which to report and all but one had found errors. All but one. That is a lot of errors in a lot of articles.

    Newspaper journalists are rarely specialists and rarely have the time, for a daily deadline, to fact check everything. So it isn’t just the Art market. Our economics professor would despair at the number of times EVERY WEEK fundamental misstatements would be made about the likely cause of a given market event.

    This may be, by the way, another reason why newspapers are losing ground to passionate, knowledgeable (or enthusiastic amateur) commentators online.

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