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The Diffusion of Innovations: A Methodological Reappraisal

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  • Manuel Trajtenberg
  • Shlomo Yitzhaki

Abstract

Studies of diffusion have traditionally relied on specific distributions-primarily the logistic- to characterize and estimate those processes.We argue here that such approach gives rise to serious problems of comparability and interpretation, and may result in large biases inthe estimates of the parameters of interest. We propose instead the Gini's expected mean differenceas ameasure of diffusion speed, discuss its advantages over the traditional approach, and tackle with it the problems of truncated processes, inter-group comparisons, and related issues. We also elaborateon the use of the hazardrate, and suggest some possible extensions. The diffusion of CT scanners is presented as an illustration.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1008.

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Date of creation: Oct 1982
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Handle: RePEc:nbr:nberwo:1008

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  1. Shalit, Haim & Yitzhaki, Shlomo, 1984. " Mean-Gini, Portfolio Theory, and the Pricing of Risky Assets," Journal of Finance, American Finance Association, vol. 39(5), pages 1449-68, December.
  2. Jennifer F. Reinganum, 1981. "Market Structure and the Diffusion of New Technology," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 618-624, Autumn.
  3. Jensen, Richard, 1982. "Adoption and diffusion of an innovation of uncertain profitability," Journal of Economic Theory, Elsevier, vol. 27(1), pages 182-193, June.
  4. Yitzhaki, Shlomo, 1982. "Stochastic Dominance, Mean Variance, and Gini's Mean Difference," American Economic Review, American Economic Association, vol. 72(1), pages 178-85, March.
  5. Jensen, Richard, 1983. "Innovation adoption and diffusion when there are competing innovations," Journal of Economic Theory, Elsevier, vol. 29(1), pages 161-171, February.
  6. Dixon, Robert J, 1980. "Hybrid Corn Revisited," Econometrica, Econometric Society, vol. 48(6), pages 1451-61, September.
  7. Romeo, Anthony A, 1975. "Interindustry and Interfirm Differences in the Rate of Diffusion of an Innovation," The Review of Economics and Statistics, MIT Press, vol. 57(3), pages 311-19, August.
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Cited by:
  1. Michal Grajek & Tobias Kretschmer, 2007. "Usage and Diffusion of Cellular Telephony, 1998-2004," ESMT Research Working Papers ESMT-07-003, ESMT European School of Management and Technology.
  2. Jonathan Beck, 2007. "The sales effect of word of mouth: a model for creative goods and estimates for novels," Journal of Cultural Economics, Springer, vol. 31(1), pages 5-23, March.
  3. Jonathan Beck & Michal Grajek & Christian Wey, 2011. "Estimating level effects in diffusion of a new technology: barcode scanning at the checkout counter," Applied Economics, Taylor and Francis Journals, vol. 43(14), pages 1737-1748.
  4. Nin Pratt, Alejandro & Hertel, Thomas W. & Foster, Kenneth A. & Rae, Allan N., 2001. "Productivity Growth And Catching-Up: Implications For China'S Trade In Livestock Products," 2001 Annual meeting, August 5-8, Chicago, IL 20590, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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