Market Conditions and Retirement of Physical Capital: Evidence Fron Oil Tankers

38 Pages Posted: 23 Aug 2000

See all articles by Murray Z. Frank

Murray Z. Frank

University of Minnesota

Iain M. Cockburn

Boston University Questrom School of Business; National Bureau of Economic Research (NBER)

Date Written: October 1992

Abstract

The endogeneity of capital retirements is studied for the particular case of oil tankers from 1979--1989. A model is estimated to examine the effect of changes in market conditions on the price and scrappage of tankers. Energy price rises had a major impact on the value of ships and on which ships were scrapped. A simple model is able to account for many features of the market. We use the information implicit in second-hand prices to ease the computational burden for the model that is estimated.

Suggested Citation

Frank, Murray Z. and Cockburn, Iain M., Market Conditions and Retirement of Physical Capital: Evidence Fron Oil Tankers (October 1992). NBER Working Paper No. w4194. Available at SSRN: https://ssrn.com/abstract=235663

Murray Z. Frank (Contact Author)

University of Minnesota ( email )

Carlson School of Management
321 19th Avenue South
Minneapolis, MN 55455
United States
612-625-5678 (Phone)

Iain M. Cockburn

Boston University Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States
617-353-3775 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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