Reducing Self-Selection Bias in Feeder Cattle Premium Estimates Using Matched Sampling

Past value-added research employs hedonic pricing models to estimate premiums associated with value-added feeder cattle characteristics. However, hedonic pricing models require restrictive assumptions and impose a functional form. Producers also self-select into a treatment group, potentially biasing estimates. Using propensity score matching, we reduce potential bias from producer self-selection and from imposing a functional form. Results suggest that hedonic pricing models may be negatively biased in estimates of premiums received by value-added calf producers. Current adopters receive a premium of $5.38/cwt from participation in a certified preconditioning program, while nonadopters would realize $5.17/cwt by adopting certification. Hedonic model values range from $0.52/cwt to $4.32/cwt, for similar or identical preconditioning programs.


Issue Date:
2014-04
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/168263
Published in:
Journal of Agricultural and Resource Economics, Volume 39, Number 1
Total Pages:
15
Series Statement:
Vol. 39 No. 1




 Record created 2017-04-01, last modified 2017-08-27

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)