Modelling Study Repair Cost Recommendation

  • Project no.451382
  • Duration 09/2017 - 01/2018

As part of the "MehrWert NRW" project of the Consumer Association of North Rhine-Westphalia (NRW) the project consortium developed information materials on the subject of repair that were effective in terms of publicity. The Wuppertal Institute prepared the "Modelling Study Repair Cost Recommendation" – in short RkE-NRW. This study takes up cause-and-effect relationships that are relevant for users in terms of repair cost-effectiveness.

The Wuppertal Institute's researchers calculated the maximum costs that would be economically reasonable for a repair. In addition, the study provides examples of the ecological benefits of repairs. The example of the washing machine shows that replacing an old appliance of energy efficiency class (EEK) A+ with a new appliance of EEK A+++ saves a total of approximately 290 euros in electricity and water costs, provided that the appliance is used for another 11 years. With a second-hand value for a device that was in operation for one year and cost 366 euros, the repair should cost a maximum of 74 euros to make it economically viable.

Part A of the study first describes the procedure and methodology of modelling and then presents the basic procedure for determining the repair cost recommendations. In addition to the basic terms and assumptions, the product type selection for which a repair cost recommendation was exemplarily created is explained. The repair cost recommendations can be determined on the basis of the used value, the efficiency costs in the use phase or from the computational combination of both.

Part B of the study summarises the results of the modelling for each product type, such as washing machines, dishwashers, fridge-freezers, televisions, smartphones and e-bikes, in a separate chapter. This describes the respective reference product and determines its used value, the efficiency costs and the purchase price of the new appliances. Finally, the project team presents the modelled repair cost recommendation.

Part C of the study summarises the results of the product-specific application of the model and describes the limitations of the model. The influence of the assumptions regarding efficiency development and usage patterns are discussed and hints for the update and further development of the model are given.

Part D deals with the fact that the repair decision cannot be made for economic reasons alone. Arguments of ecological advantages of repairs are also among the influencing factors. The environmental impacts for the manufacture of a device and the reduced environmental impacts through efficiency savings in use – based on the two selected indicators material and carbon footprint – were included. Particularly if a repair is not clearly financially worthwhile and (small) additional costs (in the sense of this model) would be incurred, the savings in raw materials and emissions can nevertheless motivate consumers to decide in favour of a repair.

The results of the modelling show for the investigated product types washing machine, dishwasher and fridge-freezer that the users should first consider the EEK of their existing appliances when making a repair decision. For appliances with low EEK, repair is hardly worthwhile economically – depending on the appliance, from EEK B and worse. Conversely, repairs are financially worthwhile for old appliances with an EEK A (washing machine, dishwasher) and EEK A+ (fridge-freezer combination). In the case of televisions, repairs can also be worthwhile for old appliances with a low energy efficiency class. In the case of smartphones and e-bikes, the recommendation depends solely on the remaining useful life: the longer this is, the less worthwhile the repair (since the second-hand value is higher for young appliances). Expensive repairs are financially worthwhile in the first two years after purchase. With an e-bike, however, more cost-intensive repairs over the entire service life are also worthwhile.

The ecological benefits were considered in a simplified way and show that repairs to smartphones and LCD TVs can be worthwhile from both a financial and ecological point of view. There are no ecological advantages with washing machines, but here a repair can be financially worthwhile. However, more differentiated analyses are required here, which model the manufacturing costs of different product variants with different EEK.