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Lifetimes of Machinery and Equipment. Evidence from Dutch Manufacturing

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  • Erumban, Abdul Azeez

    (Groningen University)

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 nonlinear regression technique to derive service lifetimes for three selected asset types: transport equipment, machinery and computers. For this purpose the benchmark capital stock surveys for different two digit industries are linked to annual discard surveys. On average the estimated lifetimes are respectively 6, 9 and 26 years for transport equipments, computers and machinery. However, these estimates vary across industries. A comparison of our estimates with Canadian, US and Japanese estimates shows notable differences in the lifetimes of all the asset types, with machinery showing the largest difference.

Suggested Citation

  • Erumban, Abdul Azeez, 2006. "Lifetimes of Machinery and Equipment. Evidence from Dutch Manufacturing," GGDC Research Memorandum GD-87, Groningen Growth and Development Centre, University of Groningen.
    • Handle: RePEc:gro:rugggd:gd-87
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    File URL: http://irs.ub.rug.nl/ppn/296974390
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    Cited by:

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    2. 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.
    3. Tsiliyannis, Christos Aristeides, 2018. "Markov chain modeling and forecasting of product returns in remanufacturing based on stock mean-age," European Journal of Operational Research, Elsevier, vol. 271(2), pages 474-489.
    4. 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.
    5. Wang, Lili & Szirmai, Adam, 2008. "Regional Capital Inputs in Chinese Industry and Manufacturing, 1978-2003," MERIT Working Papers 2008-028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Wang, Lili & Szirmai, Adam, 2012. "Capital inputs in the Chinese economy: Estimates for the total economy, industry and manufacturing," China Economic Review, Elsevier, vol. 23(1), pages 81-104.
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    8. Tsiliyannis, Christos Aristeides, 2015. "Sustainability by cyclic manufacturing: Assessment of resource preservation under uncertain growth and returns," Resources, Conservation & Recycling, Elsevier, vol. 103(C), pages 155-170.
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    10. Simms, Christopher & Frishammar, Johan & Ford, Nicholas, 2021. "The front end in radical process innovation projects: Sources of knowledge problems and coping mechanisms," Technovation, Elsevier, vol. 105(C).
    11. Barth, Nini & Cappelen, Ådne & Skjerpen, Terje & Todsen, Steinar & Åbyholm, Thom, 2016. "Expected service lives and depreciation profiles for capital assets: Evidence based on a survey of Norwegian firms," Journal of Economic and Social Measurement, IOS Press, issue 4, pages 329-369.
    12. Aravena, Claudio & Villarreal, Francisco G. & Jofré, José, 2010. "Estimación de servicios de capital y productividad para América Latina," Estudios Estadísticos 4772, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

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