  Notwithstanding almost forty years of efforts, the market for paintings still
lacks a widely accepted price index. In this paper, we introduce a simple and
intuitive metric to construct such index. Our metric is based on the price of a
painting divided by its area. This formulation rests on a solid mathematical
foundation as it corresponds to a particular type of hedonic model. However,
unlike indexes based on the time-dummy coefficients of conventional hedonic
models, this index satisfies the monotonicity condition. We demonstrate with a
simple example the advantages of our metric. We also show the dangers of
relying on the time-dummy coefficients of conventional hedonic models to
estimate returns and generate price indexes.
