Understanding Mental Book Value

Abstract

A substantial number of electric appliances are replaced while still functional, contributing to environmental challenges. Despite retaining utility, consumers may perceive that such appliances have delivered sufficient value, leading to their replacement. ’Time for a new product’ is frequently observed as a primary motivator for such decisions. Replacement decisions consist of two interconnected processes: acquiring a new appliance and retiring the old one. This study draws on the concept of mental book value to examine how consumers’ lifetime estimations influence when consumers determine that it is ’time for a new product’. Preliminary analysis of 20 interviews participants revealed that electric appliances’ mental book value are fully written off once these have met consumers’ lifetime estimations. Moreover, this research enhanced the understanding of the mental book value depreciation and lifetime estimations, providing a deeper understanding of how these factors influence replacement decisions. By addressing these dynamics, strategies can be developed to extend appliance lifetimes, reduce waste, and promote more sustainable consumer behaviour.