"Hedonic Pricing of Bulls.".

Purdue University, second place winner.

Bulls account for half of the genetic input when making improvements in cattle herds. Changing bulls is less costly than changing cows; therefore it is often the case bulls account for more rapid improvements in heritable traits. One of the problems that breeders who supply bulls face is that the attributes of bulls come bundled together so that it is difficult to determine what the value of improvements in a bull might be worth. This research estimates what values beef producers implicitly place on particular characteristics when deciding which bull will best fit the needs of their farm. A hedonic pricing model was estimated using ordinary least squares on actual transaction data and reveals the value buyers of bulls implicitly place on specific traits. For example, a ribeye area of 12.8 [in.sup.2] at the mean sale price reveals a buyer would be 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 buyer would be willing to pay an additional $1.83 for an additional pound. Therefore, this research reveals an incentive for producers of bulls to focus on improving the genetic make-up of their bulls they offer for sale.