The Effect of Aging on Ship Values: An Econometric Analysis on Major Ship Types

Abstract

Ships are investments that require significant capital and therefore the factors affecting their value must be analyzed carefully. The study in the paper is determined to what extent the effect of age, which is one of the most influential factors in sales value, differs in terms of ship type. The reports including the ship sale activities cover the period between January 2013 and December 2019 and consist of 84 monthly reports. Regression analysis was performed as the sales price as the dependent variable, age, freight, and size as independent variables. According to the results, it was determined that the ship types whose value decreases the most due to the age change are those used in gas transportation, while the least affected ship type by age is those used in bulk transportation. In addition, it has been determined that the ship type most affected by freight is those used in gas transportation and that the ship type most affected by the size is those used in container transportation. It can also be said that the ship type with the lowest risk of investment is bulk ships and the ship type with the greatest risk is gas ships. It is hoped that these results provide important information especially for players conducting their commercial activities upon sale & purchase transactions in the market.