LIFETIMES OF MACHINERY AND EQUIPMENT: EVIDENCE FROM DUTCH MANUFACTURING

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.