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Capital Equipment Replacement Decisions

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  • Batterham, Robert L.
  • Fraser, K.I.

Abstract

This paper reviews the literature on the optimal replacement of capital equipment, especially farm machinery. It also considers the influence of taxation and capital rationing on replacement decisions. It concludes that special taxation provisions such as accelerated depreciation and investment allowances are unlikely to greatly influence farmers' capital equipment replacement decisions in Australia.

Suggested Citation

  • Batterham, Robert L. & Fraser, K.I., 1995. "Capital Equipment Replacement Decisions," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 63(01), pages 1-8, April.
    • Handle: RePEc:ags:remaae:12533
    DOI: 10.22004/ag.econ.12533
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    File URL: https://ageconsearch.umn.edu/record/12533/files/63010217.pdf
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    References listed on IDEAS

    as
    1. Oscar R. Burt, 1965. "Optimal Replacement under Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(2), pages 324-346.
    2. Anthony H. Chisholm, 1966. "Criteria for Determining the Optimum Replacement Pattern," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 48(1), pages 107-112.
    3. Douglas, Robert A. & Peterson, Deborah C. & Kokic, Philip & Parameswaran, Bhamathy, 1995. "A Note on Accelerated Depreciation and Investment Allowances," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 63(01), pages 1-16, April.
    4. Paul A. Samuelson, 1964. "Tax Deductibility of Economic Depreciation to Insure Invariant Valuations," Journal of Political Economy, University of Chicago Press, vol. 72(6), pages 604-604.
    5. Lynne, Gary D., 1988. "Machinery Replacement, Multiple Optima, and the 1986 Tax Reform Act," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 20(01), pages 179-187, July.
    6. Van Tassell, Larry W. & Nixon, Clair J., 1989. "A Further Look At The Effect Of Federal Tax Laws On Optimal Machinery Replacement," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 21(2), pages 1-8, December.
    7. J. M. Bates & A. J. Rayner & P. R. Custance, 1979. "Inflation and Farm Tractor Replacement in the U.S.: A Simulation Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 331-334.
    8. R. K. Perrin, 1972. "Asset Replacement Principles," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(1), pages 60-67.
    9. Innes, Robert & Carman, Hoy F., 1988. "Tax Reform And Beef Cow Replacement Strategy," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 13(2), pages 1-13, December.
    10. Lynne, Gary D., 1988. "Machinery Replacement, Multiple Optima, And The 1986 Tax Reform Act," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 20(1), pages 1-9, July.
    11. Anthony H. Chisholm, 1974. "Effects of Tax Depreciation Policy and Investment Incentives on Optimal Equipment Replacement Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(4), pages 776-783.
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    Cited by:

    1. Micheels, Eric T. & Katchova, Ani L. & Barry, Peter J., 2004. "Machinery Investment in Illinois: A Study Examining Existing Investment Motivations," 2004 Annual meeting, August 1-4, Denver, CO 20374, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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    Keywords

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