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Macroeconomic Factors and the Thoroughbred Industry

Published online by Cambridge University Press:  28 April 2015

Peter Karungu ,
Michael Reed  and
Douglas Tvedt
Peter Karungu
Affiliation:
Department of Agricultural Economics, University of Kentucky Department of Economics, University of Witwatersrand University, Johannesburg, South Africa
Michael Reed
Affiliation:
Department of Agricultural Economics, University of Kentucky
Douglas Tvedt
Affiliation:
Department of Agricultural Economics, University of Kentucky
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Abstract

A capitalization approach is used to estimate econometrically the effects of exchange rate, interest rate and tax law changes on thoroughbred yearling prices. The analysis found that exchange rate and tax law changes have significantly influenced yearling prices since the early 1980s. Another serious price-reducing event was the 1986 tax law change. Both of these factors have counteracted the positive impact of increased purse rates on yearling prices.

Keywords

exchange ratemacroeconomicstax lawspurse ratesthoroughbreds
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 25 , Issue 1 , July 1993 , pp. 165 - 173
Copyright
Copyright © Southern Agricultural Economics Association 1993

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