Re: Endurance horse prices 1999

[K S Swigart <katswig@deltanet.com>]

On Tue, 26 Jan 1999, Lif Strand wrote:

> My point is and has been that if there is a rock bottom cost to produce
> something and no one will pay even that, then NO ONE WILL MAKE THE
> PRODUCT ANY MORE.  

This false statement is the cre of the whole discussion here, and can
pretty much be summed up in one word:

Hobby.

Most people who own horses, including the people who breed them, own
horses as a hobby and are willing, on an ongoing basis, to SPEND money on
their hobby.

Taking up the breeding aspect of the "owning horses" hobby happens to be
one of the most expensive and time consuming aspects of horse ownership,
but don't for a minute believe that people won't do it if they don't see a
return on the dollars they "invest."

They don't see it as a business investment but rather as money spent on
entertainment.

This, BTW, has been true for centuries, and the horse breeding hobby has
been passed on from generation to generation of horse owners in the same
way (allbeit less frequently) that it is passed on from generation to
generation of horses.

It is totally inappropriate to attempt to apply price/cost models to the
economics of the prices of horses; price/cost models assume that producers
who can't make a profit will go out of "business."

The reason that it is so difficult to make money owning horses (and
breeding horses is part of owning horses) is because there are so many
people who are willing to lose money doing it and finance their hobby with
"whatever else they do for money."   People motivated by profit simply
can't compete (pricewise) with people who are willing to lose money
indefinitely.

Lest you think that it is too bad, then, that there are so many hobbyists
in the "horse business, consider that if there weren't any hobbyists. If
there weren't countless people willing to lose money in horses, there
wouldn't be any horse market.

Quite frankly, people who breed horses (and I count myself among these),
need to understand that they have taken up an expensive hobby.  And I see
no reason that owners that breed horses should be any different than any
other people who choose to own horses.

There are different levels at which one can participate in the hobby of
wneing horses, and almost all of us are limited in how we participate in
this hobby by the limits of our resources (which, BTW, is true of any
hobby).  Breeding horses happens to be one of the most expensive aspects
of the horse owning hobby, and shouldn't be undertaken unless yu have the
resources to do so.

And I contend that THIS is where most "rescue" horses come from....horse
owners who, for whatever reason, underestimated the extent of the
resources that were going to be required to support their horse hobby
(resources are not limited only to money either, they include also time,
dedication, expertise, and desire).

Economically, it makes no sense, to apply the price/cost microeconomic
model to the price of endurance horses.  THe model to use is the
supply/demand model.  The price/cost model works only on the assumption
that producers/sellers are motivated by profit.  Virtually nobody who owns
horses is in it for the profit and would stop doing it if they made no
money at it.

Additionally, as a marginally unrelated comment.  To date, I would be
willing to bet that there is absolutely no correlation between the
purchase price of an endurance horse and its success in endurance.  So the
old saw "you get what you pay for" doesn't apply either.

kat
Orange County, Calif.

p.s.  If you want to look at it in a different way.  ALso, there is not
net gain (as in actually economic production) in the horse owning market.
All of the money made in the horse business comes from horse owners
(except in the case of parimutuel racing, where the punter are the
payers).  If you look at it in this way....why should endurance riders pay
extra for their horses to support breeders in their hobby?  In our
mechanized economy, horses do not "produce" anything other than
enjoyment...which is priceless, but still doesn't put food on the table or
hay in the barn.