The relative impact of macroeconomic and yearling-specific variables in determining thoroughbred yearling price

Buzby, Jean C.; Jessup, Eric

doi:10.1080/00036849400000055

Cited by 32 publications

(21 citation statements)

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“…Buzby and Jessup (1994) identified yearling-specific variables in their investigation of Thoroughbred yearling prices. Lansford, Freeman, Topliff, and Walker (1998) analyzed Quarter horse yearlings.…”

Section: Introductionmentioning

confidence: 99%

A hedonic price analysis of thoroughbred broodmare characteristics

Neibergs

2001

Agribusiness

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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.

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Section: Introductionmentioning

confidence: 99%

A hedonic price analysis of thoroughbred broodmare characteristics

Neibergs

2001

Agribusiness

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“…For example, during the 2002-03 season, 4057 yearlings were sold at auction in Australia for a total of approximately A$167 million. 5,8,9,12 Yearling-specific variables such as age or month foaled, radiographi-cally identified first phalanx fragments, history of arthroscopy, sire's stud fee, racing performance of the dam and racing performance of siblings have been consistently shown to affect the value of a yearling at sale. [4][5][6][7][8][9][10][11][12] Macroeconomic factors such as available prize money, international buyers, incentive schemes and tax benefits have been shown to have an effect on the purchase price of yearlings.…”

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confidence: 99%

“…3 A number of studies have investigated the factors that influence yearling purchase price. 4,5,7,11,12 An economically rational investor would be prepared to pay no more for a yearling than the net present value of the expected life-time earnings of the horse plus the net present value of the residual value of the horse once its racing career has finished. 5,8,9,12 Yearling-specific variables such as age or month foaled, radiographi-cally identified first phalanx fragments, history of arthroscopy, sire's stud fee, racing performance of the dam and racing performance of siblings have been consistently shown to affect the value of a yearling at sale.…”

mentioning

confidence: 99%

“…3 A number of studies have investigated the factors that influence yearling purchase price. [4][5][6][7][8][9][10][11][12] Macroeconomic factors such as available prize money, international buyers, incentive schemes and tax benefits have been shown to have an effect on the purchase price of yearlings. 5,8,9,12 Yearling-specific variables such as age or month foaled, radiographi-cally identified first phalanx fragments, history of arthroscopy, sire's stud fee, racing performance of the dam and racing performance of siblings have been consistently shown to affect the value of a yearling at sale.…”

mentioning

confidence: 99%

“…[4][5][6][7][8][9][10][11][12] Macroeconomic factors such as available prize money, international buyers, incentive schemes and tax benefits have been shown to have an effect on the purchase price of yearlings. 5,8,9,12 Yearling-specific variables such as age or month foaled, radiographi-cally identified first phalanx fragments, history of arthroscopy, sire's stud fee, racing performance of the dam and racing performance of siblings have been consistently shown to affect the value of a yearling at sale. 4,5,7,11,12 An economically rational investor would be prepared to pay no more for a yearling than the net present value of the expected life-time earnings of the horse plus the net present value of the residual value of the horse once its racing career has finished.…”

mentioning

confidence: 99%

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Association between the purchase price of Thoroughbred yearlings and their performance during the 2- and 3-year-old racing seasons

Jackson¹,

Vizard²,

Anderson³

et al. 2011

Australian Veterinary Journal

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OBJECTIVES Describe the association between the purchase price of Thoroughbred yearlings sold in Australia and racing performance as 2- and 3-year-olds. METHODS Race performance data of 2773 Thoroughbred yearlings sold at auction during 2003 were collected. Associations between purchase price and the probability of starting, the number of race starts and the prize money earned were examined. RESULTS In total, 2206 (79.6%) horses started a race. The mean number of race starts was six and the mean prize money earned was A$24,420. A total of 1711 (61.5%) horses earned prize money, 402 (14.4%) earned more than their purchase price, 312 (11.2%) earned more than A$40,000, the estimated cost of training, and 142 (5.1%) earned A$40,000 more than their purchase price. There was a positive association between purchase price category and the probability of starting, number of starts, earning prize money and earning greater than A$40,000 (P < 0.001). Purchase price category was negatively associated with the probability of earning greater than the purchase price (P < 0.001). The proportion of horses earning greater than the purchase price plus $40,000 was significantly different (P = 0.03) among the five price categories. CONCLUSION Yearling purchase price was positively associated with all race performance outcomes measured and researchers examining the race performance of yearlings purchased at sales should consider including purchase price when modelling. The Thoroughbred yearling market in Australia behaves in a similar manner to the United States market; owners pay a premium to enter the sport of racing and an additional premium in the quest to own a champion.

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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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The relative impact of macroeconomic and yearling-specific variables in determining thoroughbred yearling price

Cited by 32 publications

References 1 publication

A hedonic price analysis of thoroughbred broodmare characteristics

A hedonic price analysis of thoroughbred broodmare characteristics

Association between the purchase price of Thoroughbred yearlings and their performance during the 2- and 3-year-old racing seasons

Determinants of Thoroughbred yearling sales price in the UK

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