Hedonic pricing and the role of stud fees in the market for thoroughbred yearlings in Australia

Kim, Jun Sung; Mitchell, Sophie Deborah; Wang, Liang Choon

doi:10.1111/1467-8489.12316

Cited by 2 publications

(5 citation statements)

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“…In accordance with most previous studies, 7 , 8 , 9 , 11 , 20 , 21 colts were demonstrated to commanded significantly higher sales prices than fillies. Additionally, investigations of confounding revealed that sex was also associated with catalogue placement.…”

Section: Discussionsupporting

confidence: 91%

“…In keeping with this, the only other study to evaluate yearling sales in the UK also demonstrated that if both dam and progeny had raced and won, then the progeny's race performance had a significantly greater influence on sales price than that of the dam 11 . Progeny race performance attributes have consistently been positively associated with yearling sales price in previous studies 6,7,11,18–20,23 . The present study, however, provides additional novel detail on this established relationship, with modelling of interactions demonstrating that the effect of SRW is significant only in yearlings from cheaper sires.…”

Section: Discussionsupporting

confidence: 71%

“…11 Progeny race performance attributes have consistently been positively associated with yearling sales price in previous studies. 6,7,11,[18][19][20]23 The present study, however, provides additional novel detail on this established relationship, with modelling of interactions demonstrating that the effect of SRW is significant only in yearlings from cheaper sires.…”

Section: Discussionmentioning

confidence: 66%

“…This method is commonly utilised to understand determinants of price by allowing for the examination of how each attribute uniquely contributes to the overall value of the items while simultaneously accounting for the effects of other attributes. 5 Hedonic price modelling has been utilised to evaluate determinants of yearling sales price in Australia, 6 , 7 the USA 8 , 9 and New Zealand. 10 To the best of the authors’ knowledge, there has been only one previous UK study utilising figures from almost two decades ago.…”

Section: Introductionmentioning

confidence: 99%

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Determinants of Thoroughbred yearling sales price in the UK

Mouncey,

Alarcon,

Verheyen

2024

Veterinary Record Open

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BackgroundIndustry‐level figures suggest that up to two‐thirds of Thoroughbred breeding operations in the UK are unprofitable and that around half of sales transactions of Thoroughbred yearlings, commercial breeders’ predominant income source, return a loss. The industry strategy currently endorses investment in stallion covering fee; however, to date, a comprehensive evaluation of sales price determinants in the UK setting is lacking and could better inform economic decision making to improve profitability.MethodsSales catalogue and Weatherbys’ stud book data from all Thoroughbred yearlings sold at the 2020 Tattersalls October yearling sale in the UK were used to build a hedonic sales price model. Explanatory variables representing sire, dam, yearling and sales attributes were evaluated. The final model's accuracy was assessed using out‐of‐sample data from all yearlings sold in the equivalent 2021 sale.ResultsIn 2020, a total of 1506 catalogued yearlings, representing around 30% of the UK Thoroughbred foal crop, were sold, with a median price of £42,575 (interquartile range 15,750‒105,000; range 840‒3,570,000). The sires’ covering fee, maternal siblings’ race performance attributes, whether the yearling was the dams’ first foal, consignment size, catalogue book and day of sale within book significantly influenced auction price; however, relationships were complex with significant interaction and confounding observed. The mean model forecasting error was £2074. The use of data from only one sale could affect generalisability.ConclusionsThese novel findings can inform breeding decisions to maximise profitability, give context for current industry strategies and can inform valuations of breeding stock.

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Section: Discussionsupporting

confidence: 91%

Section: Discussionsupporting

confidence: 71%

Section: Discussionmentioning

confidence: 66%

Section: Introductionmentioning

confidence: 99%

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Determinants of Thoroughbred yearling sales price in the UK

Mouncey,

Alarcon,

Verheyen

2024

Veterinary Record Open

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“…However, the use of maternal siblings does have the benefit of comparing to horses of similar bloodlines, which the Control Group B in this study was lacking. Although yearling sales prices have been shown to be related to a sire's stud fee and progeny ( 30 ), the effect of sire was not adjusted for in this study because firstly osteochondrosis has a genetic component, and secondly to avoid problems in the analysis and interpretation since there were numerous sires which had only one or low numbers of offspring.…”

Section: Discussionmentioning

confidence: 99%

Radiographic prevalence of juvenile osteochondral conditions of the proximal interphalangeal joint of Australian Thoroughbred racehorse yearlings and associations with sales results and race performance

Faulkner

Vanderperren²,

Duchateau³

et al. 2022

Front. Vet. Sci.

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ObjectivesAscertain the radiographic prevalence and variation in characteristics of juvenile osteochondral conditions (JOC) in the proximal interphalangeal joint (PIPJ) of Australian Thoroughbred racehorse yearlings. Establish whether there are any significant associations with public auction sale results and racing performance.MethodsRetrospective evaluation of 1,098 yearling repository radiograph sets. Comparison of sales results and whole career racing performance of the case group with two control groups: maternal siblings (N = 397) and yearlings without PIP JOC (N = 391).Results6.3% of yearlings had at least one PIPJ JOC lesion with 4.8% having subchondral lucencies of the proximal phalanx (P1SC), 0.6% with subchondral lucencies of the middle phalanx (P2SC) and 0.8% with osteochondral fragmentation (OCF). P1SC were more prevalent in forelimbs and P2SC and OCF were more commonly located in the hindlimbs. 51% of PIPJ JOC were not identified on a lateromedial projection (LM). A significantly lower proportion of horses with OCF were successfully sold at public auction (p ≤ 0.05) but there was no significant difference in sales price between the case group and controls. A lower proportion of horses with PIPJ JOC made it to the racetrack to race, although this was not statistically significant. There was no significant difference in racing performance between the case group and controls, although there was a trend toward case horses earning lower career prize money and lower prize money per race (p ≤ 0.1). Lesions located in a dorsal or palmar/plantar location on the LM projection earned a lower average prize money per race (p ≤ 0.05) than those in a central location, and showed a trend toward earning lower total prize money (p ≤ 0.1) and number of places (p ≤ 0.1). There was no significant difference in performance for horses with lesions at the medial, axial or lateral aspects of the articular surface.Clinical importanceOverall, the findings of this study indicate that the presence of PIPJ JOC in radiographs of Thoroughbred yearlings should be attributed a low to moderate risk to future racing performance, however certain lesion characteristics may be associated with decreased performance.

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Hedonic pricing and the role of stud fees in the market for thoroughbred yearlings in Australia

Cited by 2 publications

References 24 publications

Determinants of Thoroughbred yearling sales price in the UK

Determinants of Thoroughbred yearling sales price in the UK

Radiographic prevalence of juvenile osteochondral conditions of the proximal interphalangeal joint of Australian Thoroughbred racehorse yearlings and associations with sales results and race performance

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