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Determinants of Weanling Thoroughbred Auction Prices

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  • Hansen, Charlotte R.
  • Stowe, C. Jill

Abstract

Determinants of the prices of weanling Thoroughbreds sold at the 2010 November Breeding Stock Sale at the Keeneland Association, Inc. are investigated. A cross-sectional dataset of 1,343 weanlings are used who were for sale at this auction. Weanlings, whose quality and racing potential is unknown, often have hammer prices at auctions that range from low to high prices, but this can also be reflected by the market at a given time. Even weanlings whose reserve price is not met at an auction, the highest bidding price reveals something about the market and the quality of that weanling based on certain determinants. But what determinants drive weanling prices in which they have yet to prove themselves in any way, but buyers are willing to buy at a low or a high price. By using hedonic price analysis, the determinants of weanling sales prices can be identified and the corresponding marginal values of those determinates estimated. Weanlings who have a sire that is successful in the breeding shed, and a dam that won graded races, as well as her progeny that won graded races, influence the price of a weanling positively. Results of this study aids sellers in the decision-making process of valuing their weanlings and, perhaps, deciding whether to enter them in the sale. Additionally, this information can be used to inform buyers in their ability to fairly value their purchase of a weanling.

Suggested Citation

  • Hansen, Charlotte R. & Stowe, C. Jill, 2016. "Determinants of Weanling Thoroughbred Auction Prices," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235919, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235919
    DOI: 10.22004/ag.econ.235919
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    References listed on IDEAS

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    1. Vickner, Steven S. & Koch, Stephen I., 2001. "Hedonic Pricing, Information, And The Market For Thoroughbred Yearlings," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 19(2), pages 1-17.
    2. Stowe, C. Jill & Ajello, Billy, 2010. "A Hedonic Price Analysis of Differentiated Products of Unknown Quality: Freshman Sire Stud Fees in the Thoroughbred Breeding Industry," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 28(1), pages 1-12.
    3. Mark Robbins & Peter Kennedy, 2001. "Buyer behaviour in a regional thoroughbred yearling market," Applied Economics, Taylor & Francis Journals, vol. 33(8), pages 969-977.
    4. Maynard, Leigh J. & Stoeppel, Kelly M., 2007. "Hedonic Price Analysis of Thoroughbred Broodmares in Foal," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 25(2), pages 1-15.
    5. Plant, Emily J. & Stowe, C. Jill, 2013. "The Price of Disclosure in the Thoroughbred Yearling Market," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 45(2), pages 1-15, May.
    6. Neibergs, J. Shannon & Thalheimer, Richard, 1997. "Price Expectations and Supply Response in the Thoroughbred Yearling Market," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 29(2), pages 419-435, December.
    7. C. Jill Stowe, 2013. "Breeding to sell: a hedonic price analysis of leading Thoroughbred sire stud fees," Applied Economics, Taylor & Francis Journals, vol. 45(7), pages 877-885, March.
    8. Poerwanto, Devie A. & Stowe, C. Jill, 2010. "The Relationship Between Sire Representation and Average Yearling Prices in the Thoroughbred Industry," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 28(1), pages 1-14.
    9. Conor Parsons & Ian Smith, 2008. "The Price of Thoroughbred Yearlings in Britain," Journal of Sports Economics, , vol. 9(1), pages 43-66, February.
    10. Neibergs, J. Shannon & Thalheimer, Richard, 1997. "Price Expectations And Supply Response In The Thoroughbred Yearling Market," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(2), pages 1-17, December.
    11. J. Shannon Neibergs, 2001. "A hedonic price analysis of thoroughbred broodmare characteristics," Agribusiness, John Wiley & Sons, Ltd., vol. 17(2), pages 299-314.
    12. Marion Robert & C. Jill Stowe, 2016. "Ready to run: price determinants of thoroughbreds from 2 year olds in training sales," Applied Economics, Taylor & Francis Journals, vol. 48(48), pages 4690-4697, October.
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    1. Steven B. Caudill & Franklin G. Mixon, 2020. "Estimating Bargaining Power in Real Estate Pricing Models: Conceptual and Empirical Issues," JRFM, MDPI, vol. 13(5), pages 1-8, May.

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    Keywords

    Agribusiness; Agricultural Finance; Demand and Price Analysis;
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