Hedonic Price Analysis of Risk Preferences in Yearling Thoroughbred Buyers

A hedonic pricing model is used to investigate yearling thoroughbred buyer’s risk preferences to illustrate how they correlate with the economic climate. Using data from Keeneland September Yearling Sale from 2006-2009, we analyze the marginal effect of sires with unknown quality on sale prices of one-year-old thoroughbreds to discuss the possible correlation between buyers’ willingness of paying for freshman sires’ offspring and the economic recession. This gives us a better standing of thoroughbred action industry as well as how it is important for evaluating the health and confidence of the entire industry. A study by C. J. Stowe (2013) identifies the importance of buyer’s risk preference. It was also shown that yearling prices are influenced by individual characteristics as well as macro-economic variables (Buzby J.C. 1994). However, the link between buyers’ willingness of paying for freshman sires’ offspring and the economic recession has not yet been discussed. We anticipate that buyers are willing to pay a premium for progeny by stallions of unknown quality when the market is stable and strong. Negative correlations between hammer price and year 2008 and year 2009 are expected.


Issue Date:
2016
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/230065
Total Pages:
15
JEL Codes:
Z21
Note:
Thoroughbred auction industry
Series Statement:
Paper
1




 Record created 2017-04-01, last modified 2017-08-28

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