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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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    References listed on IDEAS

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    1. Nicholas Oulton, 2004. "Productivity Versus Welfare; Or GDP Versus Weitzman's NDP," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 329-355, September.
    2. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," Review of Economic Studies, Oxford University Press, vol. 34(3), pages 249-283.
    3. Lock, J D, 1985. "Measuring the Value of the Capital Stock by Direct Observation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 31(2), pages 127-138, June.
    4. Coen, Robert M, 1975. "Investment Behavior, the Measurement of Depreciation, and Tax Policy," American Economic Review, American Economic Association, vol. 65(1), pages 59-74, March.
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    Cited by:

    1. 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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