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Consumer Discount Rates and the Decision to Repair or Replace a Durable Product: A Sustainable Consumption Issue

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  • John McCollough

Abstract

America has often been labeled a "throw-away" society due to the large amount of products that could have been reused but are discarded from a typical household on a daily basis. This paper attempts to answer the question of why, when given two consumers with the same income level and socio-economic background, does one consumer choose to replace an older, malfunctioning household product while the other chooses to have the product repaired for further reuse. To help address this question an enhanced replacement model is presented and empirically tested. The replacement model has been around for some time, helping consumers and firms make capital budgeting decisions. This analysis can be extrapolated to the macro level where one economy with a higher societal discount rate might be more strongly characterized as a "throw-away society" than a similar economy with lower societal consumption discount rates.

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  • John McCollough, 2010. "Consumer Discount Rates and the Decision to Repair or Replace a Durable Product: A Sustainable Consumption Issue," Journal of Economic Issues, Taylor & Francis Journals, vol. 44(1), pages 183-204.
    • Handle: RePEc:mes:jeciss:v:44:y:2010:i:1:p:183-204
    DOI: 10.2753/JEI0021-3624440109
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    Cited by:

    1. Sabbaghi, Mostafa & Cade, Willie & Behdad, Sara & Bisantz, Ann M., 2017. "The current status of the consumer electronics repair industry in the U.S.: A survey-based study," Resources, Conservation & Recycling, Elsevier, vol. 116(C), pages 137-151.
    2. Bhagyashree Katare & Hyejin Yim & Anne Byrne & H. Holly Wang & Michael Wetzstein, 2023. "Consumer willingness to pay for environmentally sustainable meat and a plant‐based meat substitute," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(1), pages 145-163, March.
    3. Satinover Nichols, Bridget & Wehr Holt, Jennifer, 2023. "A comparison of sustainability attitudes and intentions across generations and gender: a perspective from U.S. consumers," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    4. Elisa De Marchi & Alessia Cavaliere & Alessandro Banterle, 2021. "Consumers' Choice Behavior for Cisgenic Food: Exploring the Role of Time Preferences," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 866-891, June.
    5. repec:grz:wpsses:2023-01 is not listed on IDEAS
    6. Munten, Pauline & Vanhamme, Joëlle, 2023. "To reduce waste, have it repaired! The quality signaling effect of product repairability," Journal of Business Research, Elsevier, vol. 156(C).
    7. De Marchi, Elisa & Caputo, Vincenzina & Nayga, Rodolfo M. & Banterle, Alessandro, 2016. "Time preferences and food choices: Evidence from a choice experiment," Food Policy, Elsevier, vol. 62(C), pages 99-109.
    8. Sabbaghi, Mostafa & Esmaeilian, Behzad & Cade, Willie & Wiens, Kyle & Behdad, Sara, 2016. "Business outcomes of product repairability: A survey-based study of consumer repair experiences," Resources, Conservation & Recycling, Elsevier, vol. 109(C), pages 114-122.
    9. Iqbal Thonse Hawaldar & Mithun S. Ullal & Felicia Ramona Birau & Cristi Marcel Spulbar, 2019. "Trapping Fake Discounts as Drivers of Real Revenues and Their Impact on Consumer’s Behavior in India: A Case Study," Sustainability, MDPI, vol. 11(17), pages 1-20, August.
    10. Bigerna, Simona & Micheli, Silvia & Polinori, Paolo, 2021. "New generation acceptability towards durability and repairability of products: Circular economy in the era of the 4th industrial revolution," Technological Forecasting and Social Change, Elsevier, vol. 165(C).
    11. repec:grz:wpsses:2021-05 is not listed on IDEAS

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