An economic model of home appliance replacement: application to refrigerator replacement among Japanese households

Abstract

If the pattern of appliance use varies between households, then we expect that appliance replacement cycle also varies between households. Although many studies identified early adopters of new energy-efficient products, few studies have examined households that have been using old energy-inefficient products and how their characteristics are associated with product replacement. In this study, we initially modify a survival function and develop an economic model to evaluate the impact of household characteristics on appliance replacement. We subsequently apply the model in microlevel data analysis from the Survey on Carbon Dioxide Emission from Households obtained from the Ministry of the Environment of Japan. We use information about age distribution of refrigerators (REFs) and examine how family size, household income, and age of household’s head affect the replacement cycle of REFs. Our empirical results reveal that (1) large-sized, (2) high-income, and (3) young households replace REFs more rapidly. These findings suggest that policies that encourage small-sized, elderly, and low-income households to replace old appliances are needed.