Subsidizing repair: implications for the formal and informal circular economy

As the linear economy faces increasing pressure due to high material footprints and waste generation, repair emerges as a promising circular strategy to extend product lifespans. Repair can occur formally or informally, such as through self-repair or community repair, but little is currently known about the interaction between formal and informal repair decisions. This paper analyses the effects of a repair subsidy for household appliances on formal and informal repair sectors in Flanders (Belgium). Employing a Computable General Equilibrium (CGE) model and household survey data, we find that a subsidy increases formal repair expenditure and employment while also slightly increasing paid informal repair activities, indicating a complementary relationship. However, repair subsidies may crowd out unpaid informal repair among households primarily motivated by cost-saving. Nonetheless, unpaid informal repair decisions remain mainly influenced by household characteristics, risk preferences, environmental values, and perceived habits. This paper is the first to combine macroeconomic modelling with survey data on formal and informal repair decisions. We recommend policymakers to complement repair subsidies with strategies to formalise undeclared informal repair activities and fostering the development of repair skills, enabling repair as a circular strategy that contributes to a just circular transition.

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Publication Details

Journal
Journal of Cleaner Production
Published
2025-06-02
DOI
https://doi.org/10.1016/j.jclepro.2025.145898
Citations
5
Primary Topic
Sustainable Supply Chain Management
Type
article
Field-Weighted Citation Impact
11.13

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article

Subsidizing repair: implications for the formal and informal circular economy

Wim Van Opstal, Lize Borms
5 citations
Journal of Cleaner Production
Sustainable Supply Chain Management
11.13
article

Subsidizing repair: implications for the formal and informal circular economy

Wim Van Opstal, Lize Borms
article en
5 citations

Abstract

As the linear economy faces increasing pressure due to high material footprints and waste generation, repair emerges as a promising circular strategy to extend product lifespans. Repair can occur formally or informally, such as through self-repair or community repair, but little is currently known about the interaction between formal and informal repair decisions. This paper analyses the effects of a repair subsidy for household appliances on formal and informal repair sectors in Flanders (Belgium). Employing a Computable General Equilibrium (CGE) model and household survey data, we find that a subsidy increases formal repair expenditure and employment while also slightly increasing paid informal repair activities, indicating a complementary relationship. However, repair subsidies may crowd out unpaid informal repair among households primarily motivated by cost-saving. Nonetheless, unpaid informal repair decisions remain mainly influenced by household characteristics, risk preferences, environmental values, and perceived habits. This paper is the first to combine macroeconomic modelling with survey data on formal and informal repair decisions. We recommend policymakers to complement repair subsidies with strategies to formalise undeclared informal repair activities and fostering the development of repair skills, enabling repair as a circular strategy that contributes to a just circular transition.

Journal of Cleaner ProductionVol. 518
Maastricht University (NL), Flemish Institute for Technological Research (BE)
Fonds Wetenschappelijk Onderzoek
Decent work and economic growth
Openalex Percentile: Top 2%
Sustainable Supply Chain Management
11.13
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Subsidizing repair: implications for the formal and informal circular economy — Wim Van Opstal, Lize Borms · Journal of Cleaner Production (2025) | TGRS Research Map | TGRS