IDEAS home Printed from https://ideas.repec.org/p/bea/wpaper/0155.html
   My bibliography  Save this paper

Implications of Geometric Cohort Depreciation for Service-Life Distributions

Author

Listed:
  • Brian Sliker

    (Bureau of Economic Analysis)

Abstract

This paper decomposes cohort-level Geometric depreciation into a weighted average of individual non-Geometric forms. The individual forms are general enough to represent actual individual depreciation patterns adequately, and the weights on individuals resemble Gamma service-life densities under most circumstances. Researchers with a knowledge of used assets' retirement patterns, but not prices, could use the Gamma parameters to estimate the features of (stipulated) Geometric cohort depreciation. One of the individual forms, weighted appropriately, could smoothly replace Geometric depreciation when the rate of return is negative. The analysis also offers support for faster depreciation rates for structures assets in the National Income and Product Accounts.

Suggested Citation

  • Brian Sliker, 2018. "Implications of Geometric Cohort Depreciation for Service-Life Distributions," BEA Working Papers 0155, Bureau of Economic Analysis.
    • Handle: RePEc:bea:wpaper:0155
    as

    Download full text from publisher

    File URL: https://www.bea.gov/system/files/papers/Revised%20Geo%20Depr%20Gamma%20Lifespans.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Erwin Diewert & Hui Wei, 2017. "Getting Rental Prices Right for Computers: Reconciling Different Perspectives on Depreciation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 149-168, February.
    2. Adam Copeland & Wendy Dunn & George Hall, 2011. "Inventories and the automobile market," RAND Journal of Economics, RAND Corporation, vol. 42(1), pages 121-149, March.
    3. Diewert, W. Erwin & Wykoff, Frank C., 2006. "Depreciation, Deterioration and Obsolescence when there is Embodied or Disembodied Technical Change," Economics working papers diewert-06-11-23-08-38-56, Vancouver School of Economics, revised 13 Jul 2007.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brian Sliker, 2018. "Structural Estimates of Depreciation from Wholesale Auctions of Used Ford Windstar Vans," BEA Working Papers 0154, Bureau of Economic Analysis.
    2. Durrmeyer, Isis & Samano, Mario, 2016. "To Rebate or Not to Rebate: Fuel Economy Standards vs. Feebates?," TSE Working Papers 16-732, Toulouse School of Economics (TSE), revised May 2017.
    3. Crouzet, Nicolas & Oh, Hyunseung, 2016. "What do inventories tell us about news-driven business cycles?," Journal of Monetary Economics, Elsevier, vol. 79(C), pages 49-66.
    4. Brennan Platt & Nuray Akin, 2012. "A theory of search with recall and uncertain deadlines," 2012 Meeting Papers 777, Society for Economic Dynamics.
    5. Haaf, C. Grace & Morrow, W. Ross & Azevedo, Inês M.L. & Feit, Elea McDonnell & Michalek, Jeremy J., 2016. "Forecasting light-duty vehicle demand using alternative-specific constants for endogeneity correction versus calibration," Transportation Research Part B: Methodological, Elsevier, vol. 84(C), pages 182-210.
    6. Ş. Akın & Brennan Platt, 2014. "A theory of search with deadlines and uncertain recall," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(1), pages 101-133, January.
    7. Jose A. Guajardo & Morris A. Cohen & Serguei Netessine, 2016. "Service Competition and Product Quality in the U.S. Automobile Industry," Management Science, INFORMS, vol. 62(7), pages 1860-1877, July.
    8. Siqi Liu & Bhoomija Ranjan & Benjamin Reed Shiller, 2020. "Are Coarse Ratings Fine? Applications to Crashworthiness Ratings," Working Papers 132, Brandeis University, Department of Economics and International Business School.
    9. Adam Copeland, 2014. "Intertemporal substitution and new car purchases," RAND Journal of Economics, RAND Corporation, vol. 45(3), pages 624-644, September.
    10. Yoshiyuki Arata, 2017. "Endogenous business cycles caused by nonconvex costs and interactions," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(2), pages 367-391, July.
    11. S. Nuray Akin & Brennan C. Platt, 2011. "Searching on a Deadline," Working Papers 2011-11, University of Miami, Department of Economics.
    12. W. Erwin Diewert & Kiyohiko G. Nishimura & Chihiro Shimizu & Tsutomu Watanabe, 2020. "Measuring the Services of Durables and Owner Occupied Housing," Advances in Japanese Business and Economics, in: Property Price Index, chapter 0, pages 223-298, Springer.
    13. James M. Sallee, 2014. "Rational Inattention and Energy Efficiency," Journal of Law and Economics, University of Chicago Press, vol. 57(3), pages 781-820.
    14. Graddy, Kathryn & Hall, George, 2011. "A dynamic model of price discrimination and inventory management at the Fulton Fish Market," Journal of Economic Behavior & Organization, Elsevier, vol. 80(1), pages 6-19.
    15. Robert R. Inman & Michael C. Frick & Thomas D. Hitchman & Robert A. Muiter & Jonathan H. Owen & Gerald M. Takasaki, 2017. "Optimizing New-Vehicle Inventory at General Motors," Interfaces, INFORMS, vol. 47(5), pages 396-410, October.
    16. Edward P. Lazear, 2010. "Why Do Inventories Rise When Demand Falls in Housing and Other Markets?," NBER Working Papers 15878, National Bureau of Economic Research, Inc.
    17. Pesendorfer, Martin & Schiraldi, Pasquale & Silva-Junior, Daniel, 2023. "Omitted budget constraint bias in discrete-choice demand models," International Journal of Industrial Organization, Elsevier, vol. 86(C).
    18. Sima M. Fortsch & Jeong Hoon Choi & Elena A. Khapalova, 2022. "Competition can help predict sales," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 41(2), pages 331-344, March.
    19. Lu, Tingmingke, 2023. "Response of new car buyers to alternative energy policies: The role of vehicle use heterogeneity," Economic Modelling, Elsevier, vol. 120(C).
    20. Edward P. Lazear, 2012. "Eminent Paper Series — Why Do Inventories Rise When Demand Falls In Housing And Other Markets?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 57(02), pages 1-34.

    More about this item

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bea:wpaper:0155. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Andrea Batch (email available below). General contact details of provider: https://edirc.repec.org/data/beagvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.