IDEAS home Printed from
MyIDEAS: Login to save this paper

Time to Build and Shipping Prices

  • Myrto Kalouptsidi

    (Yale University)

Registered author(s):

    This paper quantifies the impact of demand uncertainty and time to build on prices, investment and surplus in the world bulk shipping industry. We explore the impact of both construction lags and the lengthening of delivery lags in periods of high investment activity by constructing a dynamic model of ship entry and exit. A rich dataset of second-hand ship sales provides direct information on key dynamic objects of the model and allows for their nonparametric estimation. We are able to estimate a ship's value function directly and use it to recover entry costs, scrap values and per period payoffs. We find that moving from time-varying, to constant, to no time to build reduces the level and volatility prices, while increasing entry and consumer (i.e. shipper) surplus. As the duration of time to build can be steered by shipbuilding subsidies, the findings of this paper provide also a first step in examining the impact of such subsidization programs -prevalent in China, South Korea and Japan- on the shipping industry.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Society for Economic Dynamics in its series 2011 Meeting Papers with number 661.

    in new window

    Date of creation: 2011
    Date of revision:
    Handle: RePEc:red:sed011:661
    Contact details of provider: Postal:
    Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:red:sed011:661. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.