Hedonic Pricing and the Role of Stud Fees in the Market for Thoroughbred Yearlings in Australia

33 Pages Posted: 28 Apr 2020

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: July 2019

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 hedonic pricing models and examine the relative role of stud fees compared to the wide range of attributes in the pricing of yearlings. We find that the price effect of stud fees is influenced by the value buyers place on both the characteristics of sires and the characteristics of sire side siblings. The findings imply that the quality of dams a sire has been matched within the breeding market has consequential effects on yearling prices through the sire's stud fee and progeny.

Keywords: auction, hedonic pricing, stud fee, thoroughbred yearling

Suggested Citation

Kim, Jun Sung and Mitchell, Sophie Deborah and Wang, Liang Choon, Hedonic Pricing and the Role of Stud Fees in the Market for Thoroughbred Yearlings in Australia (July 2019). Australian Journal of Agricultural and Resource Economics, Vol. 63, Issue 3, pp. 439-471, 2019, Available at SSRN: https://ssrn.com/abstract=3586822 or http://dx.doi.org/10.1111/1467-8489.12316

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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