Vessel valuation : an analysis of the joint non-linear impact of vessel age and time of sale in the market for handysize dry bulkers
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- Master Thesis 
This thesis investigates the joint influence of transaction time and vessel age on the valuation of second-hand tonnage. Towards this end, we use individual sales data for Handysize dry bulkers and apply a semiparametric valuation model within the Generalized Additive Model framework. Our empirical results suggest a significant non-linear relationship between the time of the transaction and the asset’s age. We find that the volatility of vessels’ year-on-year return increases with age, as well as a difference in the depreciation curve depending on the state of the market. In a booming (recovering) market, the average depreciation curve is in major terms concave (convex). These findings may yield valuable insights for market players on the lookout for investments. We argue that asset players, contrary to industrial, should seek older, more volatile, vessels, as these could potentially yield a higher return on invested capital.