Sentiment-Augmented Supply and Demand Equations for the Dry Bulk Shipping Market

Michail NA, Melas KD. Sentiment-Augmented Supply and Demand Equations for the Dry Bulk Shipping Market. Economies. 2021; 9(4):171. https://doi.org/10.3390/economies9040171

14 Pages Posted: 30 Oct 2020 Last revised: 10 Nov 2021

See all articles by Nektarios Michail

Nektarios Michail

Cyprus University of Technology

Konstantinos D. Melas

Metropolitan College, Greece - Faculty of Business and Economics; University of Western Macedonia

Date Written: August 1, 2020

Abstract

We present, for the first time in the literature, empirical estimates of the supply and demand curves for the ocean-going dry bulk sector, using a three-stage least squares methodology. Furthermore, we augment these functions with sentiment, which appears to have a positive and significant impact on supply. This supports the view that the outlook that shipowners have about the market will undoubtedly influence their decisions regarding purchasing vessels or bringing them out of lay up. Thus, our results highlight the fact that future expectations have an impact on current pricing, albeit indirectly, through their impact on the supply side. Our results further enhance the behavioral economics literature and provide important insights for both academics and professionals.

Keywords: shipping markets, demand; supply, sentiment; dry bulk, three-stage least squares

JEL Classification: G11, G12, G17, R41

Suggested Citation

Michail, Nektarios and Melas, Konstantinos, Sentiment-Augmented Supply and Demand Equations for the Dry Bulk Shipping Market (August 1, 2020). Michail NA, Melas KD. Sentiment-Augmented Supply and Demand Equations for the Dry Bulk Shipping Market. Economies. 2021; 9(4):171. https://doi.org/10.3390/economies9040171, Available at SSRN: https://ssrn.com/abstract=3690190 or http://dx.doi.org/10.2139/ssrn.3690190

Nektarios Michail

Cyprus University of Technology ( email )

Limassol, 3603
Cyprus

Konstantinos Melas (Contact Author)

Metropolitan College, Greece - Faculty of Business and Economics ( email )

74, Sorou St.
Maroussi, 15125
Greece

University of Western Macedonia ( email )

Kozani
Kozani
Greece

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