~)\. -: 

~~ 

Shipments Analysis 

Clothes Washer W or.kshop 

--
CLOTHES WASHER SHIPMENTS 

James E. McMahon, LBNL 

DOE Workshop, Washington, D.C. 

July 22, 1999 

1 

,, 

. ,, 
Process for Developing Model 

Conjoint Analysis 

Lo git Probability of Purchase Model 

Initial Model Assessment 

-- Does Not Match 

1980 - 1996 Shipments 

Revised Probability 

of Purchase Model 

Model Calibration 

I 

Calibrated Probability of 

Purchase Model 

2 
Consumer Economic Factors 

• Purchase expenses: $420 per washer 

(baseline retail price, in~luding sales tax). 

• Operating f3Xpenses: $122 per year 

- Energy expenses: average $76 per year 

(including water heating and clothes drying, 

averaged over water heaters and clothes 

dryers of different fuel types) 

- Water expenses: average $46 per year for 

combined water and wastewater rates 

3 
Clothes Washer Purchasers: 

Market Segments 

• Washer owner in existing housing 

• Moving into new housing 

• Non-owner 

(including· laundromat user) 

• (NEW} Extended lifetime washer 

4 

3/11-12/98 
nA~i~inn~ +h~+ m~'' lft~rl •~ ...,.,...,..,.'-"•'-'• ·~ •• •Y• 111uy •~au LU 

purchasing a new washer 

• Replace a working washer 

• Replace broken washer (or repair) 

• Purchase for new house 

• Become a washer owner 

(i.e., leaving the laundromat) ·· 

• [IN EACH DECISION: Purchase New or Used] 

5 
Shipment Model Flow Diagram 

(Regular Clothes Washer Owners) 

Yes Yes 

~--Buy New Washer----l 

>-----New-~--

L------Used-----

~-Repair·--+<;. >----Regular·----1 

6 
Shipments Model Flow Diagram 

(Extended Lifetime, New Housing, and Houses w/o washers) 

.------No---·· 

k>-----New---

'-------Used-----

-+<c :fii't?··>-· --------Yes-------~ 

~------No·~------­

~------No--------
INPUTS: Washer Shipments 

• AHAM 

- 82o/o of washers are obtained new 

- 26% of washers are replaced before breakdown 

- annual shipments ( 1980-present) 

• Consumer Reports 

- Repair rate averages 5°/o per year for first five 

years.· 

8 
INPUTS: Washer Shipments 

• Consumer Fqcus Groups 

- Relative importance of features 

• Conjoint Analysis 

- 2°/o go to laundromat after machine breaks 

down 

- Different income groups have similar purchase 

preferences 

- Functional form of "Likelihood of Purchase" 

model 

- Preference for top-loading washers 

9 
~ ..c 

= ..c 

£ 

Consumer Action Depends on 

Age of Washer 

1 

0.9 

0.8 

0.7 

0.6 

0.5 

0.4 

0.3 

0.2 

0.1 

0 

0 2 4 6 8 10 

Washer Age 

12 14 16 

flJ Replace 

ii Repair 

111 Replace Early 

1§!1 Keep 

10 
-en 

c: 

.Q 

"E: 

-

~ c: 

~ a. 

:.c 

Cf) 

m 

::J 

c: 

c: 

<( 

9.00 

8.00 

7.00 

6.00 

5.00 

4.00 

3.00 

2.00 

1.00 

0.00 

1980 

OUTPUT: Washer Shipments 

(No new standards) 

Units in New Housing 

1990 2000 2010 2020 

Year 

2030 

11 
,.. 

~ 

= = = < 

16 

14 

12 

10 

8 

6 

4 .. . ... ... 

Output is within So/o of Actual 

Washer Shipments (1980-1996) 

+ Historical Data 

____ Stated Preference Coefficients 

_______ .Revise Probability of Purchase Model 

__ Calibrate to 1980-96 Shipments 

t.. 

I \ 

I \ 

I \ 

I ' I \ 

I \ 

I \ 

I \ 

I \ 

I \ 

I \ 

I \ 

I ·\ 

J .. ..... -- ..... ·. - • - ,, t!.. • --------- " 

.. ... -.. 

1985 

--.. - ; . ~ • . .,.,.*' 

1990 

Year 

1995 

\ 

\ 

\ 

2000 

12 
Consumers' Reactions 

to New Standards 

• Higher equipment prices mean: 

- fewer early replacements 

- more repairs/fewer replacements 

- more purchases qf used washers 

• Lower oper~ting expenses mitigate the 

reactions to higher equipment prices. 

• At higher standard levels, preference for 

top loading amplifies reactions to higher 

• price 

13 
9 

8 

~7 

= 

~ 

·~ 

= - 6 .._, e 

"1 

- 5 = 

~ 

e 

.~ 4 

-= rL). 

-~ 3 

= = = < 2 

1 

0 

1980 

OUTPUT: Washer Shipments 

{With New Standards) 

1985 1990 

+ Historical 

-Baseline 

__._ 20o/o Level 

-.-- 25°/o Level 

-35%/40% Level 

-e- 45% Level 

-*-- 50°/o Level 

1995 2000 2005 2010 2015 2020 2025 2030 

Year 

14 . 
Standards will have LESS effect, if ... 

• Future consumers value energy and water savings 

more 

• Manufacturers act to mitigate sales decrease 

• Consumers shift to lower-priced models . 

• Early replacement programs by government or utilities 

are effective 
Standards will have LESS effect, if ... (continued) 

• High efficiency washers capture more market 

share in the baseline (no new standards) case_. 

• Sales of washer/dryer combinations dilute price 

• increase. 

• Not enough used washers are available 

• Other factors besides price and operating cost 

cause an increase in sales 

16 
Standards will have MORE effect if ... 

• Future consumers value energy and water 

savings less 

• Consumers do not adjust to front-loaders 

• High efficiency washers capture less market 

share in the baseline case. 

17 
Conclusions 

• The current clothes washer shipments model provides a very 

detailed picture of potential standards-induced impacts. 

• Assuming no mitigating actions by government or industry, 

standards-induced sales impacts are forecast to be 

- less than 10°/o for standard levels of 25°/o or below, 

- 20% to 30°/o in 2003 for higher standard levels. 

• Increased savings awareness of consumers, purchase of lowend models, limited availability of used washers, and early 

replacement and marketing programs could mitigate standardsinduced drop in. shipments. 

• Decreased consumer valuation of energy savings, or adverse 

reaction to front-loading machines could, aggravate standardsinduced drop in shipments. 

18