Hedonic Pricing of Bulls Report as inadecuate

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Bulls account for half of the genetic input when making improvements in cattleherds. Therefore, to make a rapid, less costly improvement a cattle producer is morelikely to change bulls than cows. One of the problems that breeders who supply bullsface is that the attributes of bulls come bundled together so that it is difficult to determinewhat the value of improvements in a bull might be worth. This research estimates whatvalues beef producers implicitly place on particular characteristics when deciding whichbull will best fit the needs of their farm. A hedonic pricing model was estimated usingactual transaction data and reveals the value buyers of bulls implicitly place on specifictraits. For example, a ribeye area of 12.8 in2 at the mean sale price reveals a buyer wouldbe willing to pay an additional $80.39 for a bull with an additional square inch.Likewise, a bull with a 1242 lb. 365-day weight at the mean sale price reveals a buyerwould be willing to pay an additional $1.83 for an additional pound. Therefore, thisresearch reveals an incentive for bull producers to focus on improving the genetic makeupof their bulls they offer for sale.

Subject(s): Livestock Production/Industries

Issue Date: 2007

Publication Type: Journal Article

PURL Identifier: http://purl.umn.edu/113238 Published in: SS-AAEA Journal of Agricultural Economics

Total Pages: 23

Record appears in: Agricultural and Applied Economics Association (AAEA) > SS-AAEA Journal of Agricultural Economics

Author: Smith, Jenna M.

Source: http://ageconsearch.umn.edu/record/113238?ln=en

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