A hedonic price analysis of thoroughbred broodmare characteristics

Abstract

Thoroughbred broodmares are the primary input in the foal production process. Breeders need to make informed broodmare investment decisions, since substantial financial and genetic risks are associated with overvaluing a broodmare's productive capacity. Each broodmare represents a unique combination of breeding, racing, and genetic characteristics. This study estimates the marginal values of broodmare characteristics. Results identify large price differentials for broodmares that have won or produced graded stakes race winners. The analysis provides information for marketing, accounting and management decisions. [EconLit Citation: Q130]. © 2001 John Wiley & Sons, Inc.

Hedonic Price Analysis of Non-Barren Broodmares

“…Because broodmare prospects have not been exposed to a stallion, the present contribution is the usage of four approaches to predict the covering sire's earnings for the stallion the broodmare prospect is likely to be exposed to. This approach is different from that of Neibergs (2001), who assigned a zero value to the sire's earnings for broodmare prospects. Overall, the results suggest that pedigree and the success of a broodmare's progeny are more important than the racing performance in determining the price.…”

“…The real average thoroughbred broodmare selling price doubled during the period 1990-2000, however, since peaking in 2000, the real selling price has nearly returned to its 1990 value (Keeneland Association; Neibergs 2001). Yearly fluctuations indicate that price cycles were recorded within the economy (i.e.…”

“…Additionally, barren broodmares are those who have been exposed but did not get pregnant and, thus, have not been included. Neibergs (2001) includes all broodmares sold in 1996 (e.g., in foal, barren, and prospects), whereas Maynard and Stoeppel (2007) focus on only broodmares in foal sold in 2005. The latter argue that Neibergs' (2001) assumption that the marginal impacts of the price determinants are the same for barren and in foal broodmares is invalid, particularly for the stud fee variable, where a $ 0 stud fee was assigned to barren broodmares.…”

“…Neibergs (2001) includes all broodmares sold in 1996 (e.g., in foal, barren, and prospects), whereas Maynard and Stoeppel (2007) focus on only broodmares in foal sold in 2005. The latter argue that Neibergs' (2001) assumption that the marginal impacts of the price determinants are the same for barren and in foal broodmares is invalid, particularly for the stud fee variable, where a $ 0 stud fee was assigned to barren broodmares. Consistent with Maynard and Stoeppel (2007), we assume the price of a broodmare is a function of attributes signaling the future racing performance of her foals.…”

“…Few studies exist on the price determinants of broodmares (Neibergs 2001;Maynard and Stoeppel 2007), and the data encompassed relates to prices from years prior to the Great Recession, when an unprecedented growth was recorded, almost reaching peak values, while the yearly price variability was disregarded entirely. Although breeders may hold their higher quality stock until better market conditions, the broodmare market environment has changed since the Great Recession (i.e.…”