1. Econometric perspective on Circular Economy
Andrew Rutgers

2. WHAT CAN WE TELL ABOUT THE CURRENT CIRCULAR ECONOMY?
'CE' has existed, probably as long as economics
Things are maintained and rebuilt
Things are rented
Things are resold
The concept of CE would likely seem obvious a century ago
How big is maintenance, resale, rental compared to other industries today?

3. Hypothesis
Circular Economy can increase the quantity (a) and quality (b) of employment
Circular Loops are usually done by smaller businesses
Circularity relates to the lifetime and value of products
Circularity increases with Income
Circularity decreases with inequality

4. Available Dataset - US Economic Census
Conducted every 5 years (2017 is the most recent)
Mandatory for all businesses establishments to report
Systematically collected and analyzed
Includes total revenue, total payroll, total employees
Aggregated at typically county level – though sometimes to state level depending on respondents

5. 811211: ‘Consumer Electronics Repair and Maintenance
Categorizing Loops
Industry
Retail (New)
Reuse
Resale
Maintenance
Recycling
Homes
Cars
Consumer Electronics
Clothing
811211: ‘Consumer Electronics Repair and Maintenance

6. 1. Circular Economy can increase the quantity (a) and quality (b) of employment

7. 1. Circular Economy can increase the quantity (a) and quality (b) of employment

8. 2. Circular Loops are usually done by smaller businesses

9. 2. Circular Loops are usual done by smaller businesses

10. Loop Revenue Ratio
How much of consumer spending on a good is in each loop?
New purchase
Maintenance
Rental
Resale
Loop Revenue Ratio = Revenue in Loop / Total revenue in industry
Example – Recycling :
LRR (Recycling) = Total Revenue In Recycling / (Revenue in Retail + Revenue in Maintenance + Revenue in Resale + Revenue in Recycling )

11. 3. Circularity relates to the lifetime and value of products
Clear relationship to lifetime
Though few industries strongly represented

12. 3. Circularity relates to the lifetime and value of products
Clear relationship to Value
Though few industries strongly represented

13. 4. Circularity increases with Income
Data showed no significant correlations between state by state income and LRR levels.
However: Data is all US, so income levels are relatively similar. Comparison to other countries could show more trends.

14. 5. Circularity decreases with inequality

15. Hypothesis  Results Circular Economy can increase the
quantity (a)  Maintenance and rental have higher Payroll per Revenue
quality (b)  Resale and recycling pay better than retail
Circular Loops are usually done by smaller businesses  Except recycling, yes
Circularity relates to the lifetime and value of products  clear correlations, but limited data
Circularity increases with Income  no correlations
Circularity decreases with inequality  higher rental, lower maintenance with higher inequality