Does product lifetime extension increase our income at the expense of energy consumption?

Shigemi Kagawa, Keisuke Nansai and Yuki Kudoh

Energy Economics, 2009, vol. 31, issue 2, 197-210

Abstract: The present paper contributes to modeling a simple social accounting method with cumulative product lifetime distributions and argues how product lifetime extension affects income flow throughout the entire economic system. Empirical analysis focusing on automobile use (ordinary passenger vehicle, small passenger vehicle, and light passenger vehicle) in Japan revealed that if all of the additional income gain from product lifetime extension flows into the investment sector, a one-year lifetime extension during the ten years of the study period (1990–2000) would have led to an increase in income in 2000 amounting to +7 billion yen, as well as contributing to savings in energy amounting to −4×106 GJ. That is, longer-term passenger vehicle use increases income and decreases energy consumption under special cases. We also found that in the general case when less than 93% of additional income resulting from vehicle lifetime extension is directed to the investment sector, a +1 year automobile lifetime extension increases income at the expense of energy consumption.

Keywords: Social accounting; Energy accounting; Income flow; Passenger vehicle use; Gasoline consumption; Passenger vehicle lifetime; Fuel economy; Macro rebound effect (search for similar items in EconPapers)
JEL-codes: D33 D57 E01 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:31:y:2009:i:2:p:197-210

DOI: 10.1016/j.eneco.2008.08.011

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