A Time-Varying Risk Premium in the Term Structure of Bulk Shipping Freight Rates

Roar Adland and Kevin Cullinane

Journal of Transport Economics and Policy, 2005, vol. 39, issue 2, 191-208

Abstract: This paper presents a simple argument, based on logic and maritime economic theory alone, for rejecting the applicability of the expectations theory in bulk shipping freight markets. It is shown that the risk premium must be time varying and must, in a systematic fashion, depend upon freight market conditions and the duration of a period time charter. The signs of the risk premium attributable to the various risk factors are derived where possible and the conclusion is drawn that the theoretical net risk premium will usually be negative, but may change for a short-term period charter in a strong freight market. © 2005 LSE and the University of Bath

Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://www.catchword.com/cgi-bin/cgi?ini=bc&body=l ... 0050501)39:2L.191;1- (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpe:jtecpo:v:39:y:2005:i:2:p:191-208

Access Statistics for this article

Journal of Transport Economics and Policy is currently edited by B T Bayliss, S A Morrison, A Smith and D Graham

More articles in Journal of Transport Economics and Policy from University of Bath
Bibliographic data for series maintained by Christopher F. Baum ().