324
Journal of Agricultural and Applied Economics, April 2008
Table 4. Summary Statistics for Equation (2)
|
Variable |
N |
Mean |
Standard Deviation |
Minimum |
Maximum |
|
price |
4,151 |
2,673.66 |
2,089.56 |
950.00 |
45,000.00 |
|
age |
4,151 |
446.31 |
108.51 |
298.00 |
1,107.00 |
|
birthwt |
4,151 |
83.05 |
10.14 |
45.00 |
120.00 |
|
adjweanwt |
4,151 |
666.97 |
72.22 |
408.00 |
988.00 |
|
adjyearwt |
4,151 |
1,192.17 |
104.03 |
784.00 |
1,676.00 |
|
birthepd |
4,151 |
2.49 |
1.51 |
22.50 |
7.80 |
|
weanepd |
4,151 |
38.53 |
6.84 |
11.00 |
71.00 |
|
milkepd |
4,151 |
20.48 |
4.59 |
5.00 |
34.00 |
|
yearepd |
4,151 |
73.44 |
11.82 |
19.00 |
125.00 |
|
saleorder |
4,151 |
0.46 |
0.28 |
0.00 |
1.00 |
The age and age2 results are consistent with
expectations and with previous research
(Chvosta, Rucker, and Watts; Dhuyvetter et
al.). Older bulls bring premiums relative to
younger bulls, though the premium decreases
for progressively older bulls. An F-test con-
firmed the joint significance of the three actual
weights, birthwt, adjweanwt, and adjyearwt.
Similarly, an F-test confirmed the joint signif-
icance of the four production EPDs, birthepd,
weanepd, milkepd, and yearepd. Individually,
all three physical performance measures were
significant and exhibited the expected signs.
The four production EPDs also exhibited the
expected signs, and all were statistically
significant except weanepd. As birth weight
increases, it is expected that calving difficulties
will increase, thus increasing costs. Therefore,
buyers are likely to pay less for bulls expected
to produce higher birth weights (either based
on the actual birth weight of that particular
bull or based on the birth-weight EPD).
Adjusted weaning and yearling weights (and
their corresponding EPDs) provide buyers
with a measure of a bull’s ability to produce
offspring that will more quickly (and perhaps
efficiently) produce pounds of marketable
gain.
Similarly, milkepd provides an indication of
a particular bulls’ progeny’s milk production
potential, which translates directly into rapid
calf gains. The lack of statistical significance
of the weanepd variable could be attributed to
the strong correlation between it and other
performance-predicting variables as revealed
in Table 5.
The saleorder results confirmed prior ex-
pectations that bulls selling later in the auction
bring less than those that are placed near the
beginning. Bulls whose pictures appear in the
sale catalog receive premiums relative to bulls
without pictures, indicating a buyer perception
that bulls that are ‘‘showcased’’ with a picture
in the catalog are of higher quality. Embryo
transfer bulls (et) and bulls whose dam is a
pathfinder were on average valued more
highly because of those traits.4 Bulls that have
a portion of their semen rights retained bring a
premium relative to those that do not.
Retaining semen rights may be perceived to
have a high value, or this may be an indication
that the bull has genetic potential (value)
above that revealed by the other available
information. Having a full brother in the sale
did not significantly impact the value of a
particular bull.5
The final marketing variable, seasonofsale,
shows that animals sold in the spring are
discounted relative to animals sold in the fall.
Reasons for this are unclear, though one
possible explanation for this may lie in the
fact that most sales in this study occurred in
the spring, indicating a limited supply of bulls
in the fall. If demand for bulls holds constant
throughout the year, then the limited number
4 In alternative model specifications, these two
parameters were not statistically significant.
5 Results of alternative model specifications that
were less restrictive (i.e., utilized a larger number of
observations) suggested that having a full brother in
the sale might slightly negatively impact an individual
animal’s value.