Highlights A novel PIMSE approach is proposed to forecast second-hand oil tanker price. The proposed algorithm ensures a parsimonious lag structure while maintaining high interpretability of the selected lags and explanatory variables. The proposed model outperforms the baselines in terms of three error metrics on three time series from the shipping market.
Abstract Estimating second-hand ship prices in the highly uncertain and cyclical ship trading market is a challenge due to its volatile nature. In this study, we propose a novel and highly interpretable model termed as the parsimonious intelligent model search engine (PIMSE), to investigate the relationship between key supply variables and the prices of second-hand oil tankers. Through empirical evaluation using a time series dataset spanning from 2002 to 2020, encompassing three types of oil tankers (VLCC, Suezmax, and Aframax), we assess the effectiveness and performance of PIMSE. The results demonstrate the superior performance of PIMSE compared to other estimation models in terms of its accuracy and stability. It can effectively address abrupt structural change and capture trend and seasonal variations in the time series data. Moreover, the high interpretability of PIMSE provides valuable insights into the factors that influence second-hand ship prices, empowering stakeholders in the shipping industry to make well-informed investment decisions. By leveraging PIMSE, decision-makers can gain a deeper understanding of market dynamics and navigate the complexities of the ship trading industry. Notably, PIMSE's ability to handle the cyclical nature of the ship trading market and incorporate trend and seasonal variations enhances the robustness and accuracy of second-hand ship price estimation.
Predictive analysis of sell-and-purchase shipping market: A PIMSE approach
2024-04-08
Article (Journal)
Electronic Resource
English
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