Exploring vessel-price dynamics: the case of the dry bulk market

• Published in: Maritime policy and management Vol. 46; no. 3; pp. 309 - 329
• Main Authors: Merika, Anna, Merikas, Andreas, Tsionas, Mike, Andrikopoulos, Andreas
• Format: Journal Article
• Language: English
• Published: Abingdon Routledge 03-04-2019; Taylor & Francis Ltd
• Subjects: Bayesian methods; Distribution; Dynamics; Financing; Heterogeneity; Maintenance costs; Maritime shipping; Price heterogeneity; Prices; quantile regression; Quantiles; Regression analysis; second-hand vessel price; Ships
• ISSN: 0308-8839; 1464-5254
• DOI: 10.1080/03088839.2018.1562246

We investigate second-hand vessel price heterogeneity. Based on a sample of 5,591 purchase and sale transactions in the dry bulk sector over the period 1998-2016, we deploy a nonparametric regression technique to assess the determinants of vessel price and vessel price variability. Next, we use quantile regression to estimate the effect of regressors (sources of heterogeneity) at different parts of the vessel price distribution. We find evidence that main sources of vessel price heterogeneity are the age of the ship (the older the vessel the higher its maintenance cost), the 3-month LIBOR (reflecting the cost of financing) and the annual charter rate (revenues from operation). Their influence is stronger at all higher quantiles (periods of expansion) and the median of the vessel price distribution.