What makes a freight market index ?

Roar Adland, Pierre Cariou () and Francois-Charles Wolff ()
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Roar Adland: NHH - Norwegian School of Economics and Business Administration, Department of Economics - Norwegian School of Economics and Business Administration
Pierre Cariou: Kedge BS - Kedge Business School
Francois-Charles Wolff: LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes

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Abstract: We estimate a hedonic pricing regression to generate a market index from heterogeneous fixture data in the Offshore Support Vessel (OSV) market. We consider a fixed effect framework where we control for vessel characteristics and contract-specific variables. Applied to a dataset of more than 30,000 transactions from 1989 to 2015, estimates show that around 70-80% of variation in dayrates is explained by the time fixed effects used to estimate the market index. Spot freight rates increase with engine power and transport capacity. The volatile market index is seasonal and is positively correlated to both oil prices and production volumes.

Keywords: offshore support vessel; spot freight rate; hedonic price regressions; fixture data (search for similar items in EconPapers)
Date: 2017-08
Note: View the original document on HAL open archive server: https://hal.science/hal-03913228
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Published in Transportation Research Part E: Logistics and Transportation Review, 2017, 104, pp.150 - 164. ⟨10.1016/j.tre.2017.06.006⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03913228

DOI: 10.1016/j.tre.2017.06.006

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