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An Economic Analysis Of The Effectiveness of Thoroughbred Breeder/Owner Incentive Policies

Published online by Cambridge University Press:  28 April 2015

J. Shannon Neibergs  and
Richard Thalheimer
J. Shannon Neibergs
Affiliation:
Equine Industry Program, College of Business and Public Administration, University of Louisville, Louisville, Kentucky
Richard Thalheimer
Affiliation:
Equine Industry Program, College of Business and Public Administration, University of Louisville, Louisville, Kentucky
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Abstract

Thoroughbred incentive programs are subsidy policies funded from state parimutuel tax revenue designed to promote regional race horse breeding and ownership. At issue is an ongoing debate concerning the effectiveness of alternative policies. Empirical results indicate that incentive programs have a positive economic effect, but gains to Thoroughbred breeders can be obtained by reallocating tax revenue to non-restricted purses. A policy allocating tax revenue to non-restricted purses shifts yearling demand and increases prices, while breeder subsidies shift only the supply function and therefore lower prices. Consequently, breeder revenues increase in response to a policy that favors non-restricted purses over subsidies.

Keywords

incentive programsparimutuel horse racingsubsidytaxThoroughbred
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 31 , Issue 3 , December 1999 , pp. 581 - 592
Copyright
Copyright © Southern Agricultural Economics Association 1999

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