ESTABLISHING INDEXES OF GENETIC MERIT USING HEDONIC PRICING - AN APPLICATION TO DAIRY BULLS IN ALBERTA

This study investigates the use of hedonic pricing to identify the val ue of relevant production and type traits for dairy bulls in Alberta. A hedonic pricing model is estimated that considers semen price as a f unction of individual production and longevity characteristics for a s ample of Holstein bulls. The results suggest that the most important c haracteristics used by Alberta dairy producers in valuing daily bulls are milk volume, protein and fat content, general conformation, body c apacity and the popularity of the bull. For a given set of such charac teristics, the probability that the bull's semen may be in short suppl y does not significantly affect the value. This methodology may be use d to establish a method of forecasting semen prices for newly proven b ulls. The valuation procedure may be easily updated and adjusted as pr oducers' breeding objectives change over time because of the changing economic environment. The results of this analysis suggest that hedoni c pricing may be a better method of placing a value on production and type characteristics for daily bulls than the Lifetime Profit Index cu rrently being used by the Canadian dairy industry.