A Brief History of Maritime Econometrics, 1934-2012

Abstract

This article reviews the seminal econometric1 models published by maritime economists between 1934 and 2012, indicating the main mistakes committed during this period, so that future research can avoid them. The errors were spurious regression, identification and the false assumption that maritime markets are sufficiently efficient, if co-integrated. Three further mistakes are noted: the belief that a shipping firm is its vessel; the assumption that a random walk is appropriate for modeling tanker markets, and the assumption that shipping markets are random and linear. Koopmans was correct (in 1939) in stating that the discrepancy (surplus/deficit) between supply and demand for ship space determines freight rates, something that passed unnoticed until recently. The papers reviewed cast in four centers -on the basis of the academic domicile of their authors: 1) the pioneering Dutch Center, 1934-1939, 2) the Zannetos Model, 1966, 3) the Norwegian Center, 1976-2012, and 4) the Beenstock-Vergottis Model, 1985-1993 and English Center, 1987- 2002. Unfortunately, each new shipping model rejected almost all previous ones and consequently the research did not build a clear picture. Moreover, maritime markets are not perfectly competitive, and most maritime economic concepts need a re-definition, including: shortrun, shipowners expectations and marginal cost.