Reliability and Survival of a Durable Consumption Good

Abstract

In Chapters 4 and 5, a scrapping model has been derived and tested, given a defect of the washing machine. In this chapter, we consider scrapping in the context of reliability theory. In Section 6.1 we define the hazard rate, in Section 6.2 the completion of the lifetime is considered in this context. Section 6.3 deals with repeated failures. In Section 6.4 the hazard rate is decomposed into a failure rate and a disposal rate. Section 6.5 considers non-stationarity and observed heterogeneity. Section 6.6 deals with censoring problems in the sample and in Section 6.7 estimation of the hazard rate is described. Section 6.8 deals with unobserved heterogeneity. Section 6.9 concludes.