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Continuous Market Growth Beyond Functional Satiation. Time-Series Analyses of U.S. Footwear Consumption, 1955-2002

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  • A. Frenzel Baudisch

Abstract

Market growth is driven by product innovation. Beyond functional satiation the marginal utility of product performance and variety decreases. We argue that social comparisons underlying innovation diffusion results in consumer motivations for upward assimilation toward the behavior of better performing others, even beyond functional requirements. We distinguish consumption growth patterns driven by functional vs. assimilating motivations. These patterns are tested by time-series analyses of U.S. Footwear consumption between 1955 and 2002. The acceleration of market growth since the 1970s is statistically explained by changes in price, cross-price elasticity, and the increasing demand for innovations, according to our theoretical account of consumption motivations beyond functional satiation.

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  • A. Frenzel Baudisch, 2006. "Continuous Market Growth Beyond Functional Satiation. Time-Series Analyses of U.S. Footwear Consumption, 1955-2002," Papers on Economics and Evolution 2006-03, Philipps University Marburg, Department of Geography.
    • Handle: RePEc:esi:evopap:2006-03
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    Cited by:

    1. Kaus, Wolfhard, 2013. "Beyond Engel's law - A cross-country analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 118-134.
    2. Baudisch, Alexander Frenzel, 2007. "Consumer heterogeneity evolving from social group dynamics: Latent class analyses of German footwear consumption 1980-1991," Journal of Business Research, Elsevier, vol. 60(8), pages 836-847, August.
    3. Andreas Chai, 2017. "Tackling Keynes’ question: a look back on 15 years of Learning To Consume," Journal of Evolutionary Economics, Springer, vol. 27(2), pages 251-271, April.
    4. Andreas Chai & Alessio Moneta, 2013. "Back to Engel? Some Evidence for the Hierarchy of Needs," Economic Complexity and Evolution, in: Andreas Pyka & Esben Sloth Andersen (ed.), Long Term Economic Development, edition 127, pages 33-59, Springer.

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    More about this item

    Keywords

    Product Innovation; Innovation Diffusion; Consumption Growth; Social Comparison; Time-Series Analysis;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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