Econometric Modelling of Newbuilding and Secondhand Ship Prices

The focus of this paper is on the factors that determine the prices of both newbuilt and secondhand ships. The price of a ship, like that of every other capital asset, depends on the ship's future profitability or, on the investor's expectations regarding future developments in the markets he operates. This paper developed and presented a model based on economic theory that has determined that newbuilding prices and timecharter rates have the greatest effect of all variables on the determination of secondhand ship prices, in most cases in both the short and long run. The cost of capital is only significant for bulk carrier owners. The Orderbook, as a percentage of the fleet, has a negative effect on the price of secondhand vessels only in the long run and only in large and Panamax tankers. For newbuilding prices, shipbuilding costs are found to have the most significant effect for all ship types. Timecharter rates have an effect only on a few ship segments, which is in line with theory that newbuilding prices are cost driven rather than market driven, as secondhand ship prices are. It is also found that actual exchange rates do not effect shipbuilding prices , but cost variations, due to exchange rate fluctuation, do. Finally, newbuilding prices for some ship types may be driven, to a certain extent,

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    Elsevier

    Radarweg 29
    Amsterdam,   Netherlands  1043 NX
  • Authors:
    • Haralambides, Hercules E
    • Tsolakis, S D
    • Cridland, C
  • Publication Date: 2005

Language

  • English

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Filing Info

  • Accession Number: 01010761
  • Record Type: Publication
  • ISBN: 0762311770
  • Files: TRIS
  • Created Date: Nov 9 2005 11:42AM