Lifetimes of Machinery and Equipment. Evidence from Dutch Manufacturing

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.

[1]  D. Pilat.  The economics of catch up : the experience of Japan and Korea , 1993 .

[2]  Bart van Ark,et al.  ICT investments and growth accounts for the European Union , 2002 .

[3]  P. V. Mulligen.  Alternative price indices for computers in the Netherlands using scanner data , 2003 .

[4]  Robert J. Hill,et al.  Constructing Price Indexes across Space and Time: The Case of the European Union , 2004 .

[5]  A. Erumban.  Rental Prices, Rates of Return, Capital Aggregation and Productivity: Evidence from EU and US , 2008 .

[6]  A. Maddison.  Economic Growth and Standards of Living in the Twentieth Century , 1994 .

[7]  Prices, Real Value Added and Productivity in Dutch Manufacturing, 1921-1960 , 1993 .

[8]  E. Frankema.  The Colonial Origins of Inequality: Exploring the Causes and Consequences of Land Distribution , 2006 .

[9]  N. Mulder.  New Perspectives on Service Output and Productivity: A Comparison of French and US Productivity in Transport, Communications Wholesale and Retail Trade , 1994 .

[10]  H. Brinkman,et al.  GDP per capita and the biological standard of living in contemporary developing countries , 1997 .

[11]  B. Ark.  Issues in Measurement and International Comparison of Productivity - An Overview , 1996 .

[12]  Rainer Fremdling.  The German Industrial Census of 1936. Statistics as Preparation for the War , 2003 .

[13]  Bart van Ark,et al.  Three phases of Dutch economic growth and technological change, 1815-1997 , 1999 .

[14]  Ben Gales.  In Foreign Parts : Free-Standing Companies in the Netherlands around the First World War , 1994 .

[15]  Marcel P. Timmer,et al.  The 'appropriate technology' explanation of productivity growth differentials: an empirical approach , 2005 .

[16]  Harry X. Wu.  Comparative labour productivity performance in Chinese manufacturing, 1952-1997 : an ICOP PPP approach , 2001 .

[17]  B. Ark,et al.  New estimates of labour productivity in the manufacturing sectors of Czech Republic, Hungary and Poland , 2002 .

[18]  B. Ark.  The Productivity Problem of the Dutch Economy: Implications for Economic and Social Policies and Business Strategy , 2003 .

[19]  R. Inklaar.  Cyclical Productivity in Europe and the United States: Evaluating the Evidence on Returns to Scale and Input Utilization , 2006 .

[20]  N. Mulder.  Output and Productivity in Brazilian Distribution : A Comparative View , 1994 .

[21]  Productivity in French manufacturing: an international comparative perspective , 1994 .

[22]  A. Szirmai,et al.  Growth and Divergence in Manufacturing Performance in South and East Asia , 1997 .

[23]  R. Coen,et al.  Investment Behavior, the Measurement of Depreciation, and Tax Policy , 1975 .

[24]  R. Fremdling.  Foreign trade-transfer-adaptation: the British iron making technology on the continent (Belgium and France) , 2002 .

[25]  G. Jong.  Canada's Post-War Manufacturing Performance: A Comparison with the United States , 1996 .

[26]  Marcel P. Timmer,et al.  The Impact of Computers on Productivity in the Trade Sector: Explorations with Dutch Microdata , 1999 .

[27]  G. Jong.  An International Comparison of Real Output and Labour Productivity in Manufacturing in Ecuador and the United States , 1994 .

[28]  C. Hulten,et al.  Depreciation, inflation, and the taxation of income from capital , 1981 .

[29]  A. Maddison,et al.  A Generalized Approach to International Comparison of Agricultural Output and Productivity , 1996 .

[30]  N. Oulton.  Productivity Versus Welfare: Or, Gdp Versus Weitzman's Ndp , 2002 .

[31]  Measuring and Analysing Educational Inequality: The Distribution of Grade Enrolment Rates in Latin America and Sub-Saharan Africa , 2006 .

[32]  G. S. Mudholkar,et al.  A Generalization of the Weibull Distribution with Application to the Analysis of Survival Data , 1996 .

[33]  Pierre van der Eng.  Economic benefits from colonial assets: the case of the Netherlands and Indonesia 1870-1958 , 1998 .

[34]  V. Tassenaar.  Regional differences in standard of living in the Netherlands, 1800-1875: a study based on anthropometric data , 1995 .

[35]  R. Goldsmith.  A Perpetual Inventory of National Wealth , 1951 .

[36]  W. Diewert,et al.  Cost of Capital Services and the National Accounts , 2005 .

[37]  Jang C. Hwang.  Forms and rates of economic and physical depreciation by type of assets in Canadian industries , 2003 .

[38]  Harry X. Wu,et al.  "Losing ground" : Japanese labour productivity and unit laboour cost manufacturing in comparison to the U.S. , 2003 .

[39]  N. Mulder.  Transport and Communication in Mexico and the United States: Value Added, Purchasing Power Parities and Productivity , 1994 .

[40]  P. Groote,et al.  Can growth theory contribute to our understanding of nineteenth century economic dynamics , 1994 .

[41]  B. Ark,et al.  The Delta-Model Revisited: Recent trends in the structural performance of the Dutch economy , 2000 .

[42]  N. Mulder,et al.  The International Comparison of Performance in Distribution: Value Added, Labour Productivity and PPPs in Mexican and US Wholesale and Retail Trade 1975/7 , 1993 .

[43]  Roger K. Conway,et al.  Trends in American economic growth, 1929-1982 , 1985 .

[44]  Mary O'Mahony,et al.  ICT and Europe's Productivity Performance: Industry-Level Growth Account Comparisons with the United States , 2005 .

[45]  R. Fremdling.  Anglo-German rivalry on coal markets in France, the Netherlands and Germany, 1850-1913 , 1995 .

[46]  Pierre van der Eng.  Economic benefits from colonial assets , 1998 .

[47]  D. W. Jorgenson,et al.  Capital as a Factor of Production , 1989 .

[48]  M. Timmer.  Catch Up Patterns in Newly Industrializing Countries. An International Comparison of Manufacturing Productivity in Taiwan , 1998 .

[49]  B. Ark.  Economic Growth and Labour Productivity in Europe: Half a Century of East-West Comparisons , 1999 .

[50]  Rainer Fremdling,et al.  Industrial Revolution and Scientific and Technological Progress , 1997 .

[51]  A. Maddison,et al.  An International Comparison of Real Output, Purchasing Power and Labour Productivity in Manufacturing Industries: Brazil, Mexico and the USA in 1975 , 1994 .

[52]  Marno Verbeek,et al.  A Guide to Modern Econometrics , 2000 .

[53]  H. D. Jong,et al.  Comparative productivity and structural change in Belgian and Dutch manufacturing: 1936-1987 , 1997 .

[54]  H. D. Jong,et al.  Accounting for economic growth in the Netherlands since 1913 , 1996 .

[55]  Bart van Ark,et al.  Does the European Union need to revive productivity growth , 2005 .

[56]  H. D. Jong,et al.  Industrial output and labour productivity in the Netherlands, 1913-1929: some neglected issues , 1994 .

[57]  Bart van Ark,et al.  Catching up or getting stuck? Europe's troubles to exploit ICT's productivity potential , 2006 .

[58]  Z. Griliches,et al.  The Explanation of Productivity Change , 1967 .

[59]  M. Timmer,et al.  Productivity Levels in Distributive Trades: A New ICOP Dataset for OECD Countries , 2006 .

[60]  Z. Griliches,et al.  Issues in Growth Accounting: A Reply to Edward F. Denison , 1972 .

[61]  J. Baldwin,et al.  Estimating Depreciation Rates for the Productivity Accounts , 2005 .

[62]  B. Ark.  Sectoral growth accounting and structural change in postwar Europe , 1995 .

[63]  Barbara M. Fraumeni,et al.  The Measurement of Depreciation in the U.S. National Income and Product Accounts , 1997 .

[64]  A. Hofman.  Latin American economic development.: A causal analysis in historical perspective , 1998 .

[65]  B. Ark,et al.  Comparative Productivity in East and West German Manufacturing before Reunification , 1993 .

[66]  N. Oulton.  Depreciation, obsolescence and the role of capital in growth accounting , 1995 .

[67]  Koji Nomura.  Duration of Assets: Examination of Directly Observed Discard Data in Japan , 2005 .

[68]  Ronald M. Albers.  Human Capital and Economic Growth: Operationalising Growth Theory, with Special Reference to the Netherlands in the 19th Century" , 1997 .

[69]  E. Biørn,et al.  Gross and Net Capital, and the Form of the Survival Function: Theory and Some Norwegian Evidence , 1989 .

[70]  Harald Edquist,et al.  The Swedish ICT miracle - myth or reality? , 2004, Inf. Econ. Policy.

[71]  M. Timmer,et al.  Manufacturing Performance in Indonesia, South Korea and Taiwan before and after the Crisis. An international Perspective, 1980-2000 , 2003 .

[72]  Bart Los,et al.  International convergence and divergence of material input structures: an industry-level perspective , 2009 .

[73]  M. Timmer.  On the Reliability of Unit Value Ratios in International Comparisons , 1996 .

[74]  Nanno Mulder,et al.  Transport and Communications Output and Productivity in Brazil and the USA, 1950-1990 , 1995 .

[75]  R. Hill,et al.  Standard Errors as Weights in Multilateral Price Indexes , 2006 .