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Lifetimes Of Machinery And Equipment: Evidence From Dutch Manufacturing

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  • Abdul Azeez Erumban

Abstract

This paper estimates service lifetimes for capital assets in Dutch manufacturing industries, using information on asset retirement patterns. A Weibull distribution function is estimated using a non-linear regression technique to derive service lifetimes for three selected asset types: transport equipment, machinery and computers. For this purpose, benchmark capital stock surveys for different two-digit industries are linked to annual discard surveys. On average the estimated lifetimes are 6, 9 and 26 years for transport equipment, computers and machinery, respectively. However, these estimates vary across industries. A comparison of our estimates with Canadian, U.S. and Japanese estimates shows notable differences in the lifetimes of all the asset types, with machinery showing the largest difference. Copyright 2008 The Author. Journal compilation International Association for Research in Income and Wealth 2008.

Suggested Citation

  • Abdul Azeez Erumban, 2008. "Lifetimes Of Machinery And Equipment: Evidence From Dutch Manufacturing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(2), pages 237-268, June.
  • Handle: RePEc:bla:revinw:v:54:y:2008:i:2:p:237-268
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    Cited by:

    1. Bert M. Balk, 2007. "Measuring Productivity Change without Neoclassical Assumptions: A Conceptual Analysis," CEPA Working Papers Series WP042007, School of Economics, University of Queensland, Australia.
    2. Ana Rincon-Aznar & Rebecca Riley & Garry Young, 2017. "Academic Review of Asset Lives in the UK," National Institute of Economic and Social Research (NIESR) Discussion Papers 474, National Institute of Economic and Social Research.
    3. Wang, Lili & Szirmai, Adam, 2008. "Regional Capital Inputs in Chinese Industry and Manufacturing, 1978-2003," MERIT Working Papers 028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Terje Skjerpen & Nina Barth & Ådne Cappelen & Steinar Todsen & Thom Åbyholm, 2016. "Expected service lives and depreciation profiles for capital assets. Evidence based on a survey of Norwegian firms," Discussion Papers 840, Statistics Norway, Research Department.
    5. Aravena, Claudio & Villarreal, Francisco G. & Jofré, José, 2010. "Estimación de servicios de capital y productividad para América Latina," Estudios Estadísticos 68, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

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