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Price Expectations And Supply Response In The Thoroughbred Yearling Market

Author

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  • Neibergs, J. Shannon
  • Thalheimer, Richard

Abstract

Limited information is available concerning price determination in the thoroughbred yearling market. A recursive model incorporating price expectations and biological constraints is used to estimate supply and demand functions for thoroughbred horses. Empirical results characterize a market with inelastic supply and elastic demand that converges to equilibrium under static conditions. Purses were identified as the most influential variable impacting price. Comparative statics illustrate the effectiveness of purses as a policy instrument for the thoroughbred industry. Federal tax policy also was found to have a significant impact on the decisions to breed or invest in thoroughbred yearlings.

Suggested Citation

  • 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(02), December.
  • Handle: RePEc:ags:joaaec:15061
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    File URL: http://purl.umn.edu/15061
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    References listed on IDEAS

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    1. Rosen, Sherwin & Murphy, Kevin M & Scheinkman, Jose A, 1994. "Cattle Cycles," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 468-492, June.
    2. Mukhtar Ali & Richard Thalheimer, 1997. "Transportation costs and product demand: wagering on parimutuel horse racing," Applied Economics, Taylor & Francis Journals, vol. 29(4), pages 529-542.
    3. Gulley, O. David & Scott, Frank A. Jr., 1989. "Lottery Effects on Pari-Mutuel Tax Revenues," National Tax Journal, National Tax Association;National Tax Journal, vol. 42(1), pages 89-93, March.
    4. Foster, Kenneth A & Burt, Oscar R, 1992. "A Dynamic Model of Investment in the U.S. Beef-Cattle Industry," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(4), pages 419-426, October.
    5. Gulley, O. David & Scott, Frank A. Jr., 1989. "Lottery Effects on Pari-Mutuel Tax Revenues," National Tax Journal, National Tax Association, vol. 42(1), pages 89-93, March.
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    Citations

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    Cited by:

    1. Vestal, Mallory K. & Lusk, Jayson L. & Cooper, Steven R. & Ward, Clement E., 2012. "What Are the Consequences of United States Government Slaughter Policies on Horse Prices?," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119766, Southern Agricultural Economics Association.
    2. Vinzant, Patrick L. & Neibergs, J. Shannon, 1999. "Maximum-Likelihood Estimates Of Racehorse Earnings And Profitability," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 17(1).
    3. Hansen, Charlotte & Saghaian, Sayed, 2015. "Progeny? Performance? What really matters in a stud fee," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196876, Southern Agricultural Economics Association.
    4. J. Shannon Neibergs, 2001. "A hedonic price analysis of thoroughbred broodmare characteristics," Agribusiness, John Wiley & Sons, Ltd., vol. 17(2), pages 299-314.
    5. Hansen, Charlotte R. & Stowe, C. Jill, 2017. "Determinants of Weanling Thoroughbred Auction Prices," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252780, Southern Agricultural Economics Association.
    6. Vestal, Mallory K. & Lusk, Jayson L. & DeVuyst, Eric A. & Cooper, Steven R. & Ward, Clement E., 2012. "Quarter Horse Supply and Demand: Welfare Analysis and Impacts of the Equine Processing Ban," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124536, Agricultural and Applied Economics Association.
    7. Stowe, C. Jill & Ajello, Billy, . "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.
    8. 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).
    9. 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).
    10. Philip Rodgers, 2011. "Overproduction of Yearling Thoroughbred Horses," Economic Issues Journal Articles, Economic Issues, vol. 16(1), pages 53-64, March.
    11. Poerwanto, Devie A. & Stowe, C. Jill, . "The Relationship Between Sire Representation and Average Yearling Prices in the Thoroughbred Industry," Journal of Agribusiness, Agricultural Economics Association of Georgia.

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