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Hedonic Pricing of Bulls

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  • Smith, Jenna M.

Abstract

Bulls account for half of the genetic input when making improvements in cattle herds. Therefore, to make a rapid, less costly improvement a cattle producer is more likely to change bulls than cows. One of the problems that breeders who supply bulls face is that the attributes of bulls come bundled together so that it is difficult to determine what the value of improvements in a bull might be worth. This research estimates what values beef producers implicitly place on particular characteristics when deciding which bull will best fit the needs of their farm. A hedonic pricing model was estimated using actual transaction data and reveals the value buyers of bulls implicitly place on specific traits. For example, a ribeye area of 12.8 in2 at the mean sale price reveals a buyer would be willing to pay an additional $80.39 for a bull with an additional square inch. Likewise, a bull with a 1242 lb. 365-day weight at the mean sale price reveals a buyer would be willing to pay an additional $1.83 for an additional pound. Therefore, this research reveals an incentive for bull producers to focus on improving the genetic makeup of their bulls they offer for sale.

Suggested Citation

  • Smith, Jenna M., 2007. "Hedonic Pricing of Bulls," SS-AAEA Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 2007, pages 1-23.
    • Handle: RePEc:ags:ssaaea:113238
    DOI: 10.22004/ag.econ.113238
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    References listed on IDEAS

    as
    1. McDonald, R. Allen & Schroeder, Ted C., 2003. "Fed Cattle Profit Determinants Under Grid Pricing," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 35(1), pages 1-10, April.
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    3. Lawrence, John D. & Yeboah, Godfred, 2002. "Estimating The Value Of Source Verification Of Feeder Cattle," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 20(2), pages 1-13.
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    Livestock Production/Industries;

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