Progress 12/01/07 to 11/30/12
Outputs
OUTPUTS: Activities included in this grant included (1) a national mail survey focused on farmers' buying and selling of used farm equipment, including risk tolerance and trust attitudes measures; (2) a national phone survey of farmers and non-farmers measuring risk tolerance and trust attitudes; (3) a national phone survey of farmers measuring risk tolerance and trust attitudes and current farming activities and farm structure; and (4) inspection of a random sample of used construction items offered for sale in both online and in-person auctions. Events included training of 5 undergraduate students in the techniques of equipment inspection in preparation for inspection of a random sample of used construction items; training of two post-doctoral scholars in data analysis; and training of two doctoral students in the methods of econometric analysis. Products include (1) a data base of survey results concerning farmers' attitudes and opinions concerning various ways of purchasing and selling used farm equipment, (2) a database of farmer and non-farmer risk tolerance and trust attitudes, (3) a database of inspection results from a random sample of used construction equipment sold in both online and in-person sales venues, (4) a proprietary dataset of data on sales of used tractors on eBay, (5) a proprietary data set of piglets sold in online and offline auctions, (6) regression models of farmer choice of sales and purchase venue (online versus offline) for used farm equipment, (7) regression models of venue choice (online versus offline) by sellers of used construction equipment, (8) hedonic regression models of the value of piglets as a function of sales venue, (9) regression models of seller behavior and market outcomes in eBay auctions for used tractors, (10) regression models of risk attitudes as a function of occupation (farm versus other) and demographic characteristics, and (11) regression models of farmer risk attitudes as a function of demographics. Dissemination activities included 16 presentations and posters including the following: Olimov, JM 2012. "Reserve Prices in Sequential Auctions: eBay Sales of Agricultural Tractors" Annual Meeting of SCC-76 regional research group, March 15-17, Pensacola, FL. Roe, BE 2012. "eBay: Trash or Treasure Online & Offline Quality Sorting & The Role of Attribute Transparency." Dept of AFRE, Michigan State Univ, November 12. Roe, BE 2012. "Risk Attitudes: Farmers, Small Business Owners & the General Population." Department of ARE, NC State Univ, April 24. Howard, G., Roe, BE 2011. "Comparing the Risk Attitudes of U.S. and German Farmers," EAAE Congress, Zurich, Switzerland, August 31. Roe, BE, Batte, MT, Diekmann, F 2010. "The Role of Trust and Risk Aversion in Farmers' Used Machinery Transactions." Technical University of Munich, Freising, Germany. Roe, BE, Batte, MT, Diekmann, F 2010. "Cross Channel Competition:Two Cases from the Agricultural Sector." Business School, Georgia Tech, September 14. Roe, BE, Batte, MT 2010. "Understanding the Competitiveness of Online Farm Machinery & Equipment Markets: Project Progress Report." USDA-NRI Investigators' Meeting, Denver, CO, July 24. PARTICIPANTS: Roe, Brian E., Principal Investigator Batte, Marvin T., Co-Investigator Diekmann, Florian, Collaborator, Howard, Gregory, post-doctoral scholar Davidson, Erik, post-doctoral scholar Olimov, Jafar, doctoral student Cordero-Salas, Paula, doctoral student Cramer, Andrew, undergraduate student worker Trinter, Joseph, undergraduate student worker Burns, Ron, undergraduate student worker Wyszynski, Tim, undergraduate student volunteer TARGET AUDIENCES: Target audiences included farmers, agribusiness owners and academic researchers in economics and business. Activities to reach these audiences included publications in the Ohio AgManager Newsletter and scholarly journals. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
We explore how strategic elements beyond price impact the degree of competition and the decisions of market participants by analyzing survey data obtained from individual buyers and sellers in the market for used farm machinery and equipment. Our analyses reveal that the quality of buyers' relationships with local dealers influences their likelihood of purchasing from the Internet. Results suggest that managers of local dealerships can better compete with encroaching Internet rivals by focusing on relationship maintenance and enhancement and must further exploring business models that can capture value from excellent parts and repair service. We also find farmers with higher risk tolerance are more likely to make used equipment purchases online. We compare the risk attitudes of a large, representative sample of farmers to representative samples of the general population and of nonfarm small business owners using a robust survey measure of risk tolerance. We find no difference between farmers and the general population in average risk tolerance while small business owners are significantly more risk tolerant than farmers. If the farm population shared the same demographic profile as the general population, farmers would be significantly more risk tolerant. Within the farm sample, we find risk tolerant farmers are more likely to have the largest sales, even when controlling for state-level fixed effects and other locational and personal characteristics. We also compare the prices and net revenues received by sellers in the Midwestern club-pig market at traditional face-to-face auctions to those received at Internet auctions. We find that the median pig in our data would earn a higher sale price (about 1%) and greater net revenue (about 2%) if sold in the traditional auction. In a further analysis of differences between online and offline sales venues, we analyze how sellers of used skid steer loaders sort products between online and traditional auctions based on the quality and transparency of different machine characteristics. Machines are more likely to be offered on eBay than in a local in-person auction if quality is high for systems whose integrity can measured via photo (e.g., tires, general appearance, chassis) and are more likely to be offered in traditional auctions if quality is high for systems whose integrity is more reliably evaluated in person (e.g., engine). The average quality across all systems does not drive the seller's choice of venue, suggesting tests based upon overall quality would mask the more subtle form of adverse selection occurring in this market. To further understand how online venue are used by sellers to market used farm equipment, we study seller behavior using data from eBay auctions of used tractors. We find that secret reserve prices and public reserve prices have a strong positive effect on sale prices. We provide a novel theoretical justification for the use of secret reserve prices and show that eBay serves not only as a selling platform but also as an affordable value-appraising mechanism.
Publications
- Roe, BE, Wyszynski, TE, Olimov, JM. 2011. Pigs in Cyberspace: A Natural Experiment Testing Differences between Online and Offline Club-Pig Auctions, American Journal of Agricultural Economics 93(5):1278-1291.
- Roe, BE, Batte, MT, Diekmann, F. 2012. Competition between Local Dealerships and Internet Markets: The Role of Local Relationships, Risk Tolerance and Trust in Used Farm Machinery Markets, Electronic Commerce Research and Applications, pending.
- Roe, BE. 2011. How Well Do Farmers Tolerate Risk Part 1. Ohio AgManager Newsletter, June. Available online at: http://ohioagmanager.osu.edu/farm-policy/how-well-do-farmers-tolerate -risk-part-1/
- Roe, BE. 2011. How Well Do Farmers Tolerate Risk Part 2. Ohio AgManager Newsletter, June. Available online at: http://ohioagmanager.osu.edu/farm-policy/how-well-do-farmers-tolerate -risk-part-2/
- Roe, BE, Batte, MT, Diekmann, F. 2010. The 2010 Ohio State University Used Farm Machinery & Equipment Survey: Farmers' Attitudes and Opinions about Sales via Auction, Dealer, Classified Ad and the Internet. Columbus, OH, USA. (Report No. AEDE-RP-0127-10)
- Roe, BE, Wyszynski, T. 2010. The Market for Club Pigs: This Little Piggy Sold Online. Columbus, OH: Ohio AgManager. http://ohioagmanager.osu.edu/financial-management/the-market-for-club -pigs-this-little-piggy-sold-online/.
- Wyszynski, T. 2010. Net Revenue Differences for Sellers in Online and Traditional Swine Auction Markets. Undergraduate Honors Thesis, Ohio State University.
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Progress 12/01/10 to 11/30/11
Outputs
OUTPUTS: Progress in data collection, data cleaning and analysis continued in 2011. First, the collection of data concerning the price, attributes and quality inspection ratings of used skid steers sold around Columbus, Ohio is completed and includes data for 77 machines that sold in regular or online auctions. Inspections were conducted by an undergraduate trained according to dealer inspection standards. This data collection has expanded this year to include a sample of used cars sold online and offline to provide a basis of comparison in the same region using another product category. To date 5 used cars have been inspected by a third-party inspection firm. Second, data obtained from online and offline auctions for pigs sold to youth exhibitors has been analyzed and the resulting manuscript has been presented at a key professional conference and is forthcoming in a top field journal. Third, data on the risk attitudes of U.S. farmers collected as part of the internet purchase and selling survey were analyzed and compared to data on the risk attitudes of a sample of the general U.S. population and a sample of U.S. business owners collected during 2010 via a survey implemented by an outside vendor. The analysis and comparison of these risk attitudes formed the basis of two outreach articles, one poster, one departmental seminar and one graduate seminar presentation. Fourth, risk attitude data from German farmers and German non-farm businesses has been collected from the German Socioeconomic Panel public data set. This data is being compared to responses from U.S. farmers and non-farm business previously collected as part of this project and formed the basis for a poster presented at an international conference. Fifth, a new method of analysis of the selling patterns of used tractors on eBay has been developed by a Ph. D. student funded by the project and was included as part of the student's dissertation proposal defense. Complementary laboratory experiments have been developed to test portions of this theory and will be funded by non-project funding sources. PARTICIPANTS: Brian Roe serves as principal investigator and has coordinated all research efforts so far and led in developing all manuscripts. Marvin Batte serves as co-investigator and has directed data collection efforts concerning used tractor data, provided feedback on aspects of the used machinery inspection data and has assisted in the preparation of the farmer mail survey and subsequent analyses. Florian Diekmann has helped in the preparation and analysis of the farmer mail survey. Paula Cordero Salas and Jafar Olimov have worked as graduate research assistants and have been formulating approaches to analyze the used equipment data from eBay and IronPlanet.com while Jafar Olimov has provided modeling expertise to the comparison of online and offline sales of pigs. Tim Wyszynski participated as a co-author and collected the data used for the comparison of online and offline sales of pigs. Joseph Trinter and Ron Burns worked as undergraduate research assistants and have been trained to conduct quality inspections on used machinery and have provided input into the research design focused on comparing the quality of used machines available in traditional and eBay markets. Greg Howard collected the German data on risk attitudes and aided in the analysis and writing of the poster comparing the risk attitudes of German and U.S. farmers and business owners. TARGET AUDIENCES: Farmers with access to Internet service. PROJECT MODIFICATIONS: Not relevant to this project.
Impacts
The investigators are developing a nuanced view of how U.S. farmers view and use online markets for used farm machinery and equipment by analyzing the survey data collected and a detailed vision of the risk attitudes of U.S. farmers as compared to other relevant comparison populations such as business owners. Furthermore, through analyzing data gathered from the online and offline pig markets, we are developing another estimate of the impact that online channels have upon the prices and net revenues generated during the transaction of agricultural goods. Also, an additional Ph.D. student has become aware of key drivers that differentiate online versus in-person sales venues for durable assets; this student is developing a theoretical framework to better understand how sellers use online sales channels to improve their informational position and, through this improved information, their net sales revenue from used items.
Publications
- Roe, Brian E., Timothy E. Wyszynski and Jafar M. Olimov. (2011) Pigs in Cyberspace: A Natural Experiment Testing Differences between Online and Offline Club-Pig Auctions. American J. of Agricultural Economics 93(5):1278-1291.
- Roe, Brian. 2011. How Well Do Farmers Tolerate Risk Part 1. Ohio AgManager Newsletter, June. Available online at: http://ohioagmanager.osu.edu/farm-policy/how-well-do-farmers-tolerate -risk-part-1/
- Roe, Brian. 2011. How Well Do Farmers Tolerate Risk Part 2. Ohio AgManager Newsletter, June. Available online at: http://ohioagmanager.osu.edu/farm-policy/how-well-do-farmers-tolerate -risk-part-2/
- Roe, Brian. 2011. Risk Attitudes: Farmers, Small Business Owners and the General Population. Selected paper, meeting of the SCC-76 "Economics and Management of Risk in Agriculture and Natural Resources" group, Atlanta, GA March 19.
- Roe, Brian. 2011. Risk Attitudes: Farmers, Small Business Owners and the General Population. graduate seminar, School of the Environment and Natural Resources, Ohio State University, April 15.
- Roe, Brian. 2011. Risk Attitudes: Farmers, Small Business Owners and the General Population. Departmental seminar, Department of Agricultural, Environmental and Development Economics, Ohio State University, September 29.
- Roe, Brian. 2011. The Risk Attitudes of U.S. Farmers: Comparison to the General U.S. Population and U.S. Business Owners. Selected Poster, Annual Meetings of the Agricultural and Applied Economics Association, Pittsburgh, PA, July 26.
- Howard, Greg and Brian Roe. 2011. Comparing the Risk Attitudes of U.S. and German Farmers. Selected Poster, European Association of Agricultural Economists Congress, Zurich, Switzerland, August 31.
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Progress 12/01/09 to 11/30/10
Outputs
OUTPUTS: Progress in data collection, data cleaning and analysis continued in 2010. First, the collection of data concerning the price, attributes and quality inspection ratings of skid steers sold around Columbus, Ohio is completed for nearly 60 items that sold in regular and online auctions. Inspections were conducted by an undergraduate trained according to dealer inspection standards. Second, during early 2010, we surveyed more than 5,200 U.S. farmers about their buying and selling practices for used farm machinery and equipment during early 2010. More than 2,500 (48%) responded and gave us information about recent used FME transactions, ratings of different ways to buy and sell used FME and attitudes and opinions regarding local FME dealers and used FME auction venues. Analysis has led to a published technical report, an extension publication, multiple presentations and several manuscripts in development. Third, data has been obtained from an online and offline auctions for pigs sold to youth exhibitors in a further effort to isolate the effect of online markets on agricultural goods. The analysis has led to the submission of one manuscript into peer review, generated one undergraduate honors thesis and one poster presentation. Fourth, data concerning personal risk aversion, trust attitudes and online versus offline purchase habits with respect to used cars was collected from a general U.S. population via phone survey. This data will be compared to similar data collected above from U.S. farmers. This data will allow us to isolate differences between farm and non-farm populations with regard to online market usage and risk and trust attitudes, which may drive online market usage. Fifth, data from on the price and attributes of back hoes that were listed on eBay were collected from a vendor. This data will provide another category of equipment in addition to our existing data on tractors to test for differences between two competing online used equipment sales platforms (eBay and IronPlanet.com). PARTICIPANTS: Brian Roe serves as principal investigator and has coordinated all research efforts so far and led in developing all manuscripts. Marvin Batte serves as co-investigator and has directed data collection efforts concerning used tractor data, provided feedback on aspects of the used machinery inspection data and has assisted in the preparation of the farmer mail survey and subsequent analyses. Florian Diekmann has helped in the preparation and analysis of the farmer mail survey. Paula Cordero Salas and Jafar Olimov have worked as graduate research assistants and have been formulating approaches to analyze the used equipment data from eBay and IronPlanet.com. Joseph Trinter continues to work as an undergraduate research assistant and has been trained to conduct quality inspections on used machinery and have provided input into the research design focused on comparing the quality of used machines available in traditional and eBay markets. He was provided technical training concerning the proper execution of quality inspections for used machinery using funds from the grant. TARGET AUDIENCES: The target audience includes academics, students and local officials interested in understanding the workings of on-line auction markets and the potential benefits to local constituents from participation in such markets. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
The investigators are developing a nuanced view of how U.S. farmers view and use online markets for used farm machinery and equipment by analyzing the survey data collected. Furthermore, through analyzing data gathered from the online and offline pig markets, we are developing another estimate of the impact that online channels have upon the prices and net revenues generated during the transaction of agricultural goods. Also, an additional Ph.D. student has become aware of key drivers that differentiate online versus in-person sales venues for durable assets; this student is developing a theoretical framework to better understand how sellers use online sales channels to improve their informational position and, through this improved information, their net sales revenue from used items. Finally, key economic questions concerning the differences between online and in-person markets for durable agricultural assets were shared with investigators of other USDA funded projects at an investigators' meeting held prior to the Agricultural and Applied Economics Association Annual Meetings in Denver, Colorado in July 2010.
Publications
- Roe, Brian and Tim Wyszynski. (2010) Pigs in Cyberspace: A Natural Experiment Testing Differences between Online and Offline Club-Pig Auctions (in review)
- Roe, Brian E., Marv Batte and Florian Diekmann, 2010. Understanding the Competitiveness of Online Farm Machinery & Equipment Markets: The Role of Farmer Risk Aversion & Trust, invited presentation, University of Kentucky, Ag Econ Department, April 27.
- Roe, Brian E., Batte, Marvin T. and Diekmann, Florian. 2010. The 2010 Ohio State University Used Farm Machinery & Equipment Survey: Farmer Attitudes and Opinions about Sales via Auction, Dealer, Classified Ad and the Internet. Columbus, OH, USA. (Report No. AEDE-RP-0127-10)
- Roe, Brian E., Marvin T. Batte, Florian Diekmann. 2010. 2010 OSU Used Farm Machinery & Equipment Survey: U.S. Farmer Attitudes and Opinions about Sales via Auction, Dealer, Classified Ad and the Internet. Columbus, OH: Ohio AgManager.
- Roe, Brian E., Wyszynski, Tim. 2010. The Market for Club Pigs: This Little Piggy Sold Online. Columbus, OH: Ohio AgManager.
- Wyszynski, Tim. 2010. Net Revenue Differences for Sellers in Online and Traditional Swine Auction Markets. Poster presented at the Denman Undergraduate Research Forum, Ohio State University, May.
- Wyszynski, Tim. 2010. Net Revenue Differences for Sellers in Online and Traditional Swine Auction Markets. Undergraduate Honors Thesis, Ohio State University.
- Roe, Brian E., Batte, Marvin T., Diekmann, Florian, 2010. The Role of Trust and Risk Aversion in Farmer Used Machinery Transactions. Invited presentation to the Technical University of Munich, Germany. Freising, Germany.
- Roe, Brian E., Batte, Marvin T. and Diekmann, Florian, Lecturer. 2010. Cross Channel Competition: Two Cases from the Agricultural Sector. Invited presentation to the Fisher College of Business, Burns AMIS Colloquium. Columbus, OH.
- Roe, Brian E., Batte, Marvin T. and Diekmann, Florian. 2010. Cross Channel Competition: Two Cases from the Agricultural Sector. Invited presentation to the Business School, Georgia Tech. Atlanta, GA. (September 14)
- Roe, Brian E., Batte, Marvin T. and Diekmann, Florian. 2010. The Role of Trust and Risk Aversion in Farmer Used Machinery Transactions. Presented at Agricultural & Applied Economics Association 2010AAEA,CAES, & WAEA Joint Annual Meeting. Poster Session. Denver, CO. (July 26) [Peer Reviewed]
- Roe, Brian E., Marvin T. Batte. 2010. Understanding the Competitiveness of Online Farm Machinery & Equipment Markets: Project Progress Report. Invited presentation, USDA-NRI Investigator Meeting, Denver, CO, July 24.
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Progress 12/01/08 to 11/30/09
Outputs
OUTPUTS: Several intermediate outputs have been created this year. First, data on the prices and attributes of used tractors sold in both traditional auction markets and on eBay over the past several years has been expanded to include more years of data, given a first round of cleaning and used as part of a Ph.D. candidate's dissertation proposal. This data will be further cleaned and processed in preparation for analysis during the upcoming year. Second, data concerning the price, attributes and quality inspection ratings of skid steer loaders has been collected, cleaned and given initial analysis. Third, a research protocol involving quality inspections for comparable machines sold on eBay and traditional auctions has been designed, including the recruitment of students to conduct the quality inspections, the training of students to complete quality inspections and the general framework for sampling and intercepting the machines. So far more than 20 machines from both eBay and in-person auctions have been inspected and are being prepared for analysis. Fourth, a mail survey instruments intended to gather farmer opinions concerning online versus traditional machinery sales outlets have been produced with initial mailings slated for Jan. 5, 2010. Fifth, data has been obtained from an online auction site that specializes in used farm and construction machinery. The data contains pertinent information concerning the quality and price for several classes of farm and construction machinery. The data is unique as the online site allows sellers to opt into four different types of auctions that are differentiated by the degree of information concerning item quality (3rd party mechanic reports or not) and by the style of auction (eBay-style owner auctions or weekly synchronized time auctions). Data will be cleaned and analyzed in the upcoming year. PARTICIPANTS: Brian Roe serves as principal investigator and has coordinated all research efforts so far. Marvin Batte serves as co-investigator and has directed data collection efforts concerning used tractor data, provided feedback on aspects of the used machinery inspection data and has assisted in the preparation of the farmer mail survey. Florian Diekmann has helped in the preparation of the farmer mail survey. Paula Cordero Salas has worked as a graduate research assistant and has been formulating approaches to analyze the used tractor data. She has been trained concerning core economic principles that may help differentiate online and in-person markets for durable agricultural assets. Andrew Cramer and Joseph Trinter have been hired as undergraduate research assistants and have been trained to conduct quality inspections on used machinery and have provided input into the research design focused on comparing the quality of used machines available in traditional and eBay markets. Each of these students was provided technical training concerning the proper execution of quality inspections for used machinery using funds from the grant. TARGET AUDIENCES: We will target farmers, agribusiness professionals and agricultural policy makers. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
Several changes in knowledge have already occurred. First another undergraduate students funded by the project has become more knowledgeable of the quality rating systems for used machinery. Second, the investigators have an improved knowledge of the structure of used machinery markets from initial construction and cleaning of the acquired data sets and from the design of the quality inspection research protocol. Also, a Ph.D. student has become aware of key drivers that differentiate online versus in-person sales venues for durable assets as she has begun to analyze some data in preparation for her December 2009 Ph.D. proposal defense. Finally, key economic questions concerning the differences between online and in-person markets for durable agricultural assets were shared with investigators of other USDA funded projects at an investigators' meeting held prior to the Agricultural and Applied Economics Association Annual Meetings in Milwaukee, Wisconsin, in July 2009.
Publications
- No publications reported this period
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Progress 12/01/07 to 11/30/08
Outputs
OUTPUTS: Several intermediate outputs have been created this year. First, data on the prices and attributes of used tractors sold in both traditional auction markets and on eBay over the past several years has been collected, organized and given a first round of cleaning. This data will be further cleaned and processed in preparation for analysis during the upcoming year. Second, data concerning the price, attributes and quality inspection ratings of skid steer loaders has been collected, cleaned and given initial analysis. Third, a research protocol involving quality inspections for comparable machines sold on eBay and traditional auctions has been designed, including the recruitment of students to conduct the quality inspections, the training of students to complete quality inspections and the general framework for sampling and intercepting the machines. Fourth, initial drafts of mail survey instruments intended to gather farmer opinions concerning online versus traditional machinery sales outlets have been produced; revisions to the instruments will continue throughout the upcoming year. PARTICIPANTS: Brian Roe serves as principal investigator ahd has coordinated all research efforts so far. Marvin Batte serves as co-investigator and has directed data collection efforts concerning used tractor data and provided feedback on other aspects of data collection. Erick Davidson was hired as a post-doctoral researcher for two months to organize and provide initial cleaning for the used tractor data that was acquired. Paula Cordero Salas has been hired as a graduate research assistant and has been formulating approaches to analyze the used tractor data. Curtis Tobe, Derek Schroeder and Andrew Cramer have been hired as undergraduate research assistants and have been trained to conduct quality inspections on used machinery and have provided input into the research design focused on comparing the quality of used machines available in traditional and eBay markets. Each of these students was provided technical training concerning the proper execution of quality inspections for used machinery using funds from the grant. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
Several changes in knowledge have already occurred. First several undergraduate students funded by the project have become more knowledgeable of quality rating systems for used machinery. Second, the investigators have an improved knowledge of the structure of used machinery markets from initial construction and cleaning of the acquired data sets and from the design of the quality inspection research protocol. The lead investigator and an undergraduate student have increased knowledge of the quality drivers of prices for used machinery, which has lead to a paper written by the student for university course credit.
Publications
- No publications reported this period
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