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The Effect of Usage and Size on Tractor Depreciation
Author(s) -
Perry Gregory M.,
Bayaner Ahmet,
Nixon Clair J.
Publication year - 1990
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242335
Subject(s) - tractor , depreciation (economics) , common value auction , consignment , bankruptcy , value (mathematics) , economics , agricultural economics , business , agricultural science , econometrics , microeconomics , mathematics , statistics , marketing , finance , engineering , profit (economics) , automotive engineering , environmental science , financial capital , capital formation
An econometric model was estimated to explain prices for tractors sold at auction. Tractor age, hours of use, size, and condition were statistically significant explanatory variables. Real tractor depreciation most closely approximated a sum‐of‐the‐years digits pattern. Tractors sold at consignment and bankruptcy auctions brought a lower price than tractors sold by retiring farmers. High levels of usage did not greatly reduce tractor value, but tractors with low annual usage brought substantial premiums in the auction market.