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Quarter Horse Supply and Demand: Welfare Analysis and Impacts of the Equine Processing Ban

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  • Vestal, Mallory K.
  • Lusk, Jayson L.
  • DeVuyst, Eric A.
  • Cooper, Steven R.
  • Ward, Clement E.

Abstract

Despite the existence of over 2.5 million Quarter Horses in the U.S., there has heretofore been little information available on the structural parameters underpinning the Quarter Horse market. In this paper, we compiled a unique data set, merging together information on registrations from the American Quarter Horse Association and price data from a large regional horse auction. The data is used to estimate the supply of yearling Quarter Horses using biological production lags to identify the key structural parameters; we find an own-price elasticity of short- and long-run supply of 0.32 and 0.27. An inverse demand function is also estimated, and after accounting for endogeneity, we find a price flexibility of own-price yearling demand of -0.71. Results reveal that demand shifted inward following the horse processing ban, resulting in deadweight annual losses of over $4 million in the yearling Quarter Horse market.

Suggested Citation

  • 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.
  • Handle: RePEc:ags:aaea12:124536
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    File URL: http://purl.umn.edu/124536
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    References listed on IDEAS

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    1. Taylor, Mykel R. & Dhuyvetter, Kevin C. & Kastens, Terry L. & Douthit, Megan & Marsh, Thomas L., 2006. "Show Quality Quarter Horse Auctions: Price Determinants and Buy-Back Practices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(03), December.
    2. 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.
    3. J. Shannon Neibergs, 2001. "A hedonic price analysis of thoroughbred broodmare characteristics," Agribusiness, John Wiley & Sons, Ltd., vol. 17(2), pages 299-314.
    4. 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.
    5. Lange, Kelly Y. & Johnson, Jeffrey W. & Wilson, Kris & Johnson, Wesley, 2010. "Price Determinants of Ranch Horses Sold at Auction in Texas," 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida 56491, Southern Agricultural Economics Association.
    6. 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).
    7. 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(02), pages 419-435, December.
    8. Brester, Gary W. & Marsh, John M., 1983. "A Statistical Model Of The Primary And Derived Market Levels In The U.S. Beef Industry," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 8(01), July.
    9. Lansford, Notie H., Jr. & Freeman, David W. & Topliff, Donald R. & Walker, Odell L., 1998. "Hedonic Pricing of Race-Bred Yearling Quarter Horses Produced by Quarter Horse Sires and Dams," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 16(2).
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    Keywords

    horse; harvesting; supply; demand; elasticity; Agricultural and Food Policy; Demand and Price Analysis;

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