Determinants of Weanling Thoroughbred Auction Prices

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.