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LIFETIMES OF MACHINERY AND EQUIPMENT: EVIDENCE FROM DUTCH MANUFACTURING
Author(s) -
Erumban Abdul Azeez
Publication year - 2008
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2008.00272.x
Subject(s) - weibull distribution , econometrics , asset (computer security) , stock (firearms) , capital asset , economics , service (business) , manufacturing , business , statistics , finance , engineering , computer science , economy , mathematics , marketing , mechanical engineering , computer security
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.