Research proposal part 2. (1600 words)

SAMPLE PROPOSAL PROVIDED BY UNIVERSITY

Research Methods: Part 2

Methodology and Structure

Student name: Margaux Ashley Adricula

ID Number: H00227824

Course Title: C39RE Research Methods

Submission Date: April 4, 2019

Word Count: 1,857

Table of Contents

Introduction….……..………….……….….............................................................. 3

Research Strategy................................................................................................3

Data Collection Method……………….....…….………………………………….…..4

Data Analysis Techniques………….……….….……………………………………..5

a) Hedonic Regression Model……………………………………………………6

b) Analysis tools…………………………………………………………………...7

Ethical Issues…….…….……………….………………….…………………………..7

Timeline of Work……...........................................................................................8

Structure of Final Work….....................................................................................9

References……………........................................................................................10

Introduction

The first part of the research proposal examines how the growth in the Middle Eastern art market plus the limited research papers published on art as investment constitute the rationale behind the writing of a dissertation paper which considers whether Middle Eastern art can be a valid investment alternative to shares and bonds.

The research aims to analyze the desirability of the risk-return profile of art when it acts as an alternative investment and its suitability for diversification purposes, subsequent to the consideration of transaction costs.

The second part of this research proposal will encompass the justification behind the research strategy and methodology that will be utilized along with the philosophical paradigms that underpin it.

Research Strategy

In Saunders’s (2012) research onion, the philosophy is situated in the outermost layer as it is the foundation upon which the approach, methodology, and strategy to be used will rely on. This denotes that the beginning of the research design process entails the identification of the research ontology, the study of being or reality (O’Gorman and MacIntosh, 2015). An objective stance will be adopted as the research will be dealing with measurable facts, not narratives nor opinions. Therefore, this study falls under positivism.

The positivist epistemology, which are assumptions about what information is regarded as acceptable knowledge, believes that reality can be measured (Burrell and Morgan, 1979). It is primarily quantitative and usually connected to methodologies that deal with numerical data and collection and analysis techniques that are experimental in nature (Tashakkori and Teddlie, 1998).

Since the research has already been located within a philosophical paradigm, the strategy to be used can now be identified because the paradigm influences what is

considered as reliable data and the way it should be analyzed (Kivunja and Kuyini, 2017). The main strategy for this study will involve undertaking a mono-quantitative method wherein a hedonic regression model will be estimated to be able to create an index of Middle Eastern art returns. This research will necessitate the collection of art auction prices as well as the retrieval of returns data of financial securities like shares and bonds from different online databases. Hedonic regression and correlation analyses will then be applied to these data to address the research question regarding the suitability of art as a substitute for financial securities. The quantitative approach will be chosen over the qualitative approach not only because it is the most logical choice, but also because it will enable the analysis of a larger sample size over a longer span of time. Moreover, the researcher can maintain independence because there is little opportunity for data manipulation and subjective feelings when dealing with numbers, as opposed to an interview where the researcher can lead the interviewee on to influence results (Daniel, 2016).

Following the trail of positivism and a quantitative methodological choice, it can be said that this research will follow the deductive approach where the researcher can formulate a proposition and test this against observations within the study (Wilson, 2010).

Data Collection Method

The execution of the research plan will commence with the collection of data. This study will predominantly make use of secondary data, in particular archival data, that need to be downloaded from online databases to be able to fulfil the research objectives.

First, the prices of Islamic and Middle Eastern art that have been auctioned from the year 2005 to 2018 will be taken from the auction results archive of the two main leading auction houses in the world, Sotheby’s and Christie’s. Additionally, data will also be collected from Artprice.com, one of the most dominant online art price databases in the world. This will be the website of choice as it catalogues an abundance of artists coming from different geographical regions. Besides the prices, the data about the artwork will also include different details like the name of the artist, the style of art, the dimensions of the painting, and whether it was signed.

The time frame of thirteen years was chosen because Christie’s first sale in Dubai took place in 2005. By examining these years, the effect of macroeconomic factors, just like the financial crisis of 2008, can also be observed (McIlhagga, 2018). Another determinant behind this choice is the year the stock exchanges Dubai Financial Market (DFM), Abu Dhabi Securities Exchange (ADX), and NASDAQ Dubai were founded, in the early 2000s. This is significant because returns from the same period of securities listed on these stock markets will also be needed as these will constitute the financial returns to which the resulting art index returns will be compared to. Share prices will be extracted from Datastream, an international database that provides information on equities and stock indices.

With regards to samples, cluster sampling will be used to narrow down on which data can be incorporated in the study. Only art works in the form of paintings and art of the loom, such as carpets and textiles, will be included in the sample set. The medium of art will be restricted to these two categories only because the fastest growing sector of the market, modern and contemporary art, often come in the form of paintings (Moore, 2018). Also, it is easier to compare art that have similar dimensions, as opposed to sculptures and jewelry. Textiles were also chosen as they are very much engrained in the Middle Eastern culture and is a favorite decoration piece. A sample set of around 600 to 1,000 items of art will be analyzed to avoid sample bias and be representative of the whole population (Bryman and Bell, 2003).

Data Analysis Techniques

Once the data has been collected and prepared, it is succeeded by data analysis using statistical techniques to enable the testing of the research hypothesis (Sekaran and Bougie, 2009). Initial analysis will be in the form of descriptive statistics wherein central tendency, for instance the mean price of artworks sold by an artist, dispersion, and shape of the data will be calculated. This will then be followed by inferential statistics, drawing conclusions about the population based on data from the sample (Creswell and Guetterman, 2019).

a) Hedonic Regression Model

In estimating art prices indices, two of the most recognized methods are the hedonic regression model and the repeat-sales regression. The latter requires that an artwork has been resold to be able to be classified as a repeat-sale. Several authors (Mei and Moses, 2005; Korteweg, Kraüssl, and Verwijmeren, 2013) in the literature have opted for this method; however, the choice was made possible as they were studying the mature American art market that had a multitude of data available, which is far from the case of the growing Middle Eastern art market. Therefore, the main statistical model that will be used in this study is the hedonic regression analysis.

First used in 1939 to examine changes in automobile prices over a period of time, the model was developed to be able to value assets that are heterogeneous in nature such as real estate, cars, and art (Sopranzetti, 2015). The central idea behind hedonic regressions is taking the individual characteristics of an asset and then giving each a distinct value, which implies that the price of an asset depends on the value of its attributes (Anderson et al., 2016).

The study will be applying the formula modelled from the work of Kraeussl and Lee (2010).

In this formula, the natural logarithm of the sales price, Pkt , of a painting is the dependent variable while the independent variable is the characteristics of the artwork, represented by Xnkt. As the norm in other articles, these attributes can include the name of the artist, medium used, auction house of sale, and the date of sale. Other elements of the formula are the intercept, 0, the coefficient of the attribute X, βj, the antilog of the coefficients, t, the time dummy variable, Ct, and the error term, εkt

Once the price of each of the sample artworks has been regressed, an art price index, which spans the years 2005 to 2018, can be constructed. The index will represent the expected returns from art. To evaluate whether investing in an alternative asset is a sound decision, its returns will be compared to the returns of the securities, whose data will be retrieved from a database. The returns will be adjusted for its corresponding risk and transaction costs to show the real returns, eliminating the possibility of an upward bias.

To further enrich the study, additional characteristics like the living status of the artist when the artwork was sold or whether the piece was signed will be incorporated into the calculations as it is believed that they significantly impact returns through influencing demand (Garay, Vielma, and Villalobos, 2017). Additionally, the correlation between the returns of art and financial assets will be run to ascertain opportunities for diversification. A low correlation will indicate that art can be integrated into a portfolio of assets.

b) Analysis Tools

For the encoding and summarization of data, Microsoft Excel will be utilized. Once prepared, the data set will be run in either SPSS or R Studio, a professional software especially built for statistical computations, to conduct the regression and correlation analyses.

Ethical Issues

Ethical issues regarding harming participants and invasion of privacy have come to light due to their prevalence in qualitative research wherein the researcher is involved in personal interaction (Diener and Crandall, 1978). This study will solely make use of secondary data that is publicly available on the Internet, and thus, problems concerning individuals’ consent will not surface. The university ethics policy will guide the way the research will be conducted to avoid problems of ethical misconduct.

Timeline of Work

An overview detailing the whole dissertation process from beginning until the end will be essential for the success of the research project as this will bring awareness on tasks to be accomplished and their respective deadlines. With a timetable, the researcher will be on target and be more likely to achieve expected results.

The Gantt chart illustrates the planned schedule of work from September 2019 to March 2020.

Start Date	End Date	Description	Duration (days)
9/9	9/25	Search for literature	17
9/26	10/13	Extended research proposal	18
10/14	11/10	Write draft literature review	28
11/11	12/5	Collect data from databases	25
12/6	1/11	Statistical analysis of data	37
1/12	1/25	Draw conclusions from results	14
1/26	1/30	Progress report	5
1/31	2/13	Draft of introduction	14
2/14	3/17	Writing up of the draft dissertation	32
3/18	3/25	Revise for logical flow and presentation	8
3/26	3/26	Submit dissertation	1

Structure of final work

The dissertation will follow a basic structure consisting of five chapters. Chapter 1 is the introduction which opens the paper and begins with discussing the problem to be solved, importance of the research, and potential beneficiaries (McMillan and Schumacher, 2010). A background on the status of the Middle Eastern market will also be part of this section. Chapter 2 will be dedicated to a review of literature related to art as investment. Under this section, the researcher will present what has already been done in the field of study and how the research gap can be bridged. Chapter 3 will provide details about the methodology to be used at arriving at a solution and will encompass the sources of data and data collection and analysis techniques. Chapter 4 will be a narrative regarding the results developing from the methodology undertaken. It will include the actual findings and potential implications of the study. Chapter 5, the final section, will be a summary of information that was discussed in the earlier chapters while reiterating the main points of the findings.

References

Anderson, S., Ekelund, R., Jackson, J. and Tollison, R. (2016). Investment in early American art: the impact of transaction costs and no-sales on returns. Journal of Cultural Economics, 40(3), pp.335-357.

Bryman, A. and Bell, E. (2003) Business Research Methods. Oxford: Oxford University Press.

Burrell, G. and Morgan, G. (1979). Sociological Paradigms and Organisational Analysis. 1st ed. [ebook] London: Heinemann, pp.3-5. Available at: http://sonify.psych.gatech.edu/~ben/references/burrell_sociological_paradigms_and_organisational_analysis.pdf [Accessed 25 Mar. 2019].

Creswell, J. and Guetterman, T. (2019). Educational research. 6th ed. New York: Pearson.

Daniel, E. (2016). The Usefulness of Qualitative and Quantitative Approaches and Methods in Researching Problem-Solving Ability in Science Education Curriculum. Journal of Education and Practice, [online] 7(15), p.94. Available at: https://files.eric.ed.gov/fulltext/EJ1103224.pdf [Accessed 27 Mar. 2019].

Diener, E. and Crandall, R. (1978). Ethics in social and behavioral research. Chicago, Ill.: University of Chicago Press.

Garay, U., Vielma, G. and Villalobos, E. (2017). Art as an investment alternative: the case of Argentina. Academia Revista Latinoamericana de Administración, 30(3), pp.362-382.

Javed, S. (2008). Online facilitated mathematics learning in vocational education. Ph.D. Victoria University.

Kivunja, C. and Kuyini, A. (2017). Understanding and Applying Research Paradigms in Educational Contexts. International Journal of Higher Education, [online] 6(5), p.26. Available at: https://files.eric.ed.gov/fulltext/EJ1154775.pdf [Accessed 25 Mar. 2019].

Korteweg, A., Kraussl, R. and Verwijmeren, P. (2013). Does it Pay to Invest in Art? A Selection-Corrected Returns Perspective. SSRN Electronic Journal, [online] pp.1-15. Available at: http://economics.soc.uoc.gr/macro/docs/Year/2014/papers/paper_3_159.pdf [Accessed 23 Mar. 2019].

Kraeussl, RGW & Lee, J 2010 'Art as an Investment: The Top 500 Artists' SSRN Working Paper Series, no. 1536047, SSRN, http://ssrn.com/abstract=1536047.

McIlhagga, S. (2018). UAE leads the way as Middle East art market blossoms. The National. [online] Available at: https://www.thenational.ae/business/economy/uae-leads-the-way-as-middle-east-art-market-blossoms-1.802405 [Accessed 23 Mar. 2019].

McMillan, J. H., & Schumacher, S. (2010). Research in education: Evidence-based inquiry, 7th Ed. Boston: Pearson.

Mei, J. and Moses, M. (2005). Beautiful Asset: Art as Investment. The Journal of Investment Consulting, [online] 7(2), pp.1-6. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1702419 [Accessed 23 Mar. 2019].

O’Gorman, K. and MacIntosh R. (2016). ‘Research Philosophy and Paradigm’, in Paterson, A. (ed.) Research Methods for Accounting and Finance. Oxford: Goodfellow Publishers Limited, pp.64-66

Saunders, M., Lewis, P. and Thornhill, A. (2012) Research Methods for Business Students. Pearson Education Ltd., Harlow.

Sekaran, U. and Bougie, R. (2009). Research Methods for Business: A Skill Building Approach. 5th ed. West Sussex: John Wiley & Sons Ltd., pp.303-310.

Sopranzetti, B. (2015). Hedonic Regerssion Models. Ph.D. Rutgers University.

Tashakkori, A. and Teddlie, C. (1998). Mixed Methodology: Combining Qualitative and Quantitative Approaches. 1st ed. California: Sage Publications, Inc.

Wilson, J. (2010). Essentials of Business Research: A Guide to Doing Your Research Project. 1st ed. London: SAGE Publications Ltd, p.7.

Start Date Search for literature Extended research proposal Write draft literature review Collect data from databases Statistical analysis of data Draw conclusions from results Progress report Draft of introduction Writing up of the draft dissertation Revise for logical flow and presentation Submit dissertation 43717 43734 43752 43780 43805 43842 43856 43861 43875 43908 43916 Duration (days) Search for literature Extended research proposal Write draft literature review Collect data from databases Statistical analysis of data Draw conclusions from results Progress report Draft of introduction Writing up of the draft dissertation Revise for logical flow and presentation Submit dissertation 17 18 28 25 37 14 5 14 32 8 1

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