Hedonic Pricing and Forecasting in the Market for Thoroughbred Yearlings

31 Pages Posted: 16 Jan 2018

See all articles by Jun Sung Kim

Jun Sung Kim

Monash University - Department of Econometrics & Business Statistics

Sophie Deborah Mitchell

Australian Competition and Consumer Commission (ACCC)

Liang Choon Wang

Monash University - Department of Economics

Date Written: January 9, 2018

Abstract

Using data from one of Australia's largest thoroughbred auction houses, we investigate the price determinants of thoroughbred yearlings sold at auction. We include novel key variables to construct various hedonic pricing models, and test whether the models forecast sufficiently well out-of-sample to be a useful tool for buyers and sellers. We find that the price of a yearling is responsive to the sire's stud fee and the average price of the yearling's siblings. Out-of-sample forecasting suggests that our model provides significant improvement over existing models.

Keywords: thoroughbred yearling, hedonic pricing, forecasting, auction

JEL Classification: Q11, Q13, D44, D46

Suggested Citation

Kim, Jun Sung and Mitchell, Sophie Deborah and Wang, Liang Choon, Hedonic Pricing and Forecasting in the Market for Thoroughbred Yearlings (January 9, 2018). Available at SSRN: https://ssrn.com/abstract=3099302 or http://dx.doi.org/10.2139/ssrn.3099302

Jun Sung Kim (Contact Author)

Monash University - Department of Econometrics & Business Statistics ( email )

Wellington Road
Clayton, Victoria 3168
Australia

Sophie Deborah Mitchell

Australian Competition and Consumer Commission (ACCC) ( email )

Australia

Liang Choon Wang

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria
Australia

HOME PAGE: http://sites.google.com/site/liangchoonwang/

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