Valuing Farm Financial Information

important information for public institutions debating the allocation of resources to encouraging
and supporting maintenance of farm records and to new research and training on ways to better
record and analyze financial records.

Another important message from this study is that experimental auctions can be used to
elicit the values for extremely high-valued goods. This study also demonstrates some challenges
in implementing experimental auctions for high-valued goods. For this study, the theoretical
construct of interest was willingness-to-accept. We were interested in the value individuals
placed on the records they owned. The study indicated that a quarter of the individuals were not
willing to state a bid to sell their records. Such a finding is difficult to reconcile in that there is
likely some amount of money that would indeed make an individual indifferent to having their
records and not having them. What the result likely implies is that some individuals either do not
understand the mechanism or are “protesting” the auction as conducted. That low-performing,
older, and less-educated farmers were less likely to submit a bid is consistent with this
hypothesis.

This study illustrates experimental auction methods need not be limited to low-valued
goods or food. Despite the relatively high frequency of no-bidders, bidding behavior conformed
to a priori expectations, i.e., farms with higher gross sales valued their records more highly,
suggesting a reasonable degree of validity. This study also demonstrated how experimental
auctions can be used to value a relatively complex good comprised of many sub-components and
offered one method for separately valuing each sub-component.

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