Cost Structures in Livestock Auction Markets: Average Versus Optimal Efficiency

Abstract

The central role that local auction facilities play in the marketing of feeder, and in some areas slaughter, livestock has resulted in a large volume of literature relating auction costs to auction volume or size. Most auction cost studies have been based on statistical analyses of market accounting costs, although several have been based on synthetic construction of technically efficient market facility models. Studies of the former type include those by Lindberg and Judge (Oklahoma) and Wilson and Kuehn (West Virginia). Examples of the latter type are studies by Gibb and Riley (Michigan) and Kuehn (West Virginia).