IDEAS home Printed from https://ideas.repec.org/a/ags/ssaaea/113238.html

Hedonic Pricing of Bulls

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/113238/files/Paper2.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.113238?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. John M. Marsh, 2003. "Impacts of Declining U.S. Retail Beef Demand on Farm-Level Beef Prices and Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 902-913.
    2. McDonald, R. Allen & Schroeder, Ted C., 2003. "Fed Cattle Profit Determinants Under Grid Pricing," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 35(1), pages 97-106, April.
    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.
    4. Kalyn T. Coatney & Dale J. Menkhaus & John D. Schmitz, 1996. "Feeder Cattle Price Determinants: An Hedonic System of Equations Approach," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 18(2), pages 193-211.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Williams, Brian R. & DeVuyst, Eric A. & Peel, Derrell S. & Raper, Kellie Curry, 2014. "Reducing Self-Selection Bias in Feeder Cattle Premium Estimates Using Matched Sampling," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(01), pages 1-15, April.
    2. Atkinson, Rebecca & Sanders, Dwight R. & Jones, Karen & Altman, Ira J., . "An Evaluation of Purebred Bull Pricing: Implications for Beef Herd Management," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2010, pages 1-9.
    3. Johnson, Heather C. & Ward, Clement E., 2006. "Impact of Beef Quality on Market Signals Transmitted by Grid Pricing," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(01), pages 1-14, April.
    4. Ward, Clement E., 2005. "Factors Influencing the Extent of Grid Pricing of Fed Cattle," 2005 Conference, April 18-19, 2005, St. Louis, Missouri 19035, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    5. Frank, Joshua, 2008. "Is there an "animal welfare Kuznets curve"?," Ecological Economics, Elsevier, vol. 66(2-3), pages 478-491, June.
    6. Philippe Marcoul & John Lawrence, 2007. "Grader Bias in Cattle Markets? Evidence from Iowa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 890-903.
    7. Eivind Hestvik Braekkan & Sverre Braathen Thyholdt, 2014. "The Bumpy Road of Demand Growth--An Application to Atlantic Salmon," Marine Resource Economics, University of Chicago Press, vol. 29(4), pages 339-350.
    8. Fantu Bachewe & Derek Headey & Bart Minten, 2023. "Price predictors in an extended hedonic regression framework: An application to wholesale cattle markets in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 54(2), pages 289-306, March.
    9. Scott W. Fausti & Zhiguang Wang & Bashir A. Qasmi & Matthew A. Diersen, 2014. "Risk and marketing behavior: pricing fed cattle on a grid," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 601-612, September.
    10. Hueth, Brent & Lawrence, John D., 2006. "Information Transmission in Cattle Markets: A Case Study of the Chariton Valley Beef Alliance," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 24(01), pages 1-15.
    11. Fausti, Scott W. & Qasmi, Bashir A. & Diersen, Matthew A & Adamson, Bill, 2014. "Grid Valuation of Beef Carcass Quality: Market Power and Market Trends," Economics Staff Papers 171423, South Dakota State University, Department of Economics.
    12. Blank, Steven C. & Saitone, Tina L. & Sexton, Richard J., 2014. "Seller-Offered Forward Contracts: An Additional Benefit to Cattle Producers from Satellite Video Auctions," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162323, Southern Agricultural Economics Association.
    13. Maxence Gérard & Stéphane De Cara & Guy Meunier, 2025. "Mitigating greenhouse gas emissions from the cattle sector: Land‐use regulation as an alternative to emissions pricing," American Journal of Agricultural Economics, John Wiley & Sons, vol. 107(1), pages 312-345, January.
    14. Ashfield, A. & Wallace, M. & Crosson, P., 2014. "Economic comparison of pasture based dairy calf-to-beef production systems under temperate grassland conditions," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 3(3), pages 1-12.
    15. Meilin Ma & Jayson L. Lusk, 2022. "Concentration and Resilience in the US Meat Supply Chains," NBER Chapters, in: Risks in Agricultural Supply Chains, National Bureau of Economic Research, Inc.
    16. Dragan Miljkovic & Daniel Mostad, 2007. "Obesity and low-carb diets in the united states: A herd behavior model," Agribusiness, John Wiley & Sons, Ltd., vol. 23(3), pages 421-434.
    17. Ward, Clement E., 2005. "Supply Effects on Price Discovery and Pricing Choice for Fed Cattle," 2005 Conference, April 18-19, 2005, St. Louis, Missouri 19034, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    18. Melissa G. S. McKendree & Glynn T. Tonsor & Ted C. Schroeder & Nathan P. Hendricks, 2020. "Impacts of Retail and Export Demand on United States Cattle Producers," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 866-883, May.
    19. Yeboah, Godfred, 1999. "Estimating the value of "Source Verification" in Iowa feeder cattle markets," ISU General Staff Papers 1999010108000018186, Iowa State University, Department of Economics.
    20. Schulz, Lee L. & Dhuyvetter, Kevin C. & Doran, Beth, 2014. "Factors Affecting Preconditioned Calf Price Differentials: How much do Market and Sale Conditions Matter?," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170570, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ssaaea:113238. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.