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Free riding and durable adoption: a test of color television consumption in rural China

  • Rong, Zhao

Using the consumption of color television sets in rural China, this paper documents the existence of a type of network effect – free riding across neighbors, which reduces the propensity of non-owners to purchase. I construct a model of timing the purchase of a durable good in the presence of free riding, and test its key implications using household survey data in rural China.

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File URL: http://mpra.ub.uni-muenchen.de/33434/1/MPRA_paper_33434.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 33434.

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Date of creation: 15 Aug 2011
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Handle: RePEc:pra:mprapa:33434
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  1. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Wiley Blackwell, vol. 60(3), pages 531-42, July.
  2. Sendhil Mullainathan & Marianne Bertrand & Erzo F.P. Luttmer, 1998. "Network Effects and Welfare Cultures," Working papers 98-21, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Austan Goolsbee & Peter J. Klenow, 1999. "Evidence on Learning and Network Externalities in the Diffusion of Home Computers," NBER Working Papers 7329, National Bureau of Economic Research, Inc.
  4. Sangin Park, 2004. "Quantitative Analysis of Network Externalities in Competing Technologies: The VCR Case," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 937-945, November.
  5. Rong, Zhao & Yao, Yang, 2003. "Public service provision and the demand for electric appliances in rural China," China Economic Review, Elsevier, vol. 14(2), pages 131-141.
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  7. Rosenzweig, Mark R., 1986. "Risk, Implicit Contracts and the Family in Rural Areas of Low-Income Countries," Bulletins 7518, University of Minnesota, Economic Development Center.
  8. Robert Jensen & Emily Oster, 2007. "The Power of TV: Cable Television and Women's Status in India," NBER Working Papers 13305, National Bureau of Economic Research, Inc.
  9. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
  10. Fafchamps, Marcel & Lund, Susan, 2003. "Risk-sharing networks in rural Philippines," Journal of Development Economics, Elsevier, vol. 71(2), pages 261-287, August.
  11. Ernst R. Berndt & Robert S. Pindyck & Pierre Azoulay, 2003. "Consumption Externalities and Diffusion in Pharmaceutical Markets: Antiulcer Drugs," Journal of Industrial Economics, Wiley Blackwell, vol. 51(2), pages 243-270, 06.
  12. Jacoby, Hanan G & Skoufias, Emmanuel, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Wiley Blackwell, vol. 64(3), pages 311-35, July.
  13. Rosenzweig, Mark R & Wolpin, Kenneth I, 1993. "Credit Market Constraints, Consumption Smoothing, and the Accumulation of Durable Production Assets in Low-Income Countries: Investment in Bullocks in India," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 223-44, April.
  14. Townsend, Robert M, 1994. "Risk and Insurance in Village India," Econometrica, Econometric Society, vol. 62(3), pages 539-91, May.
  15. Benjamin A. Olken, 2009. "Do Television and Radio Destroy Social Capital? Evidence from Indonesian Villages," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 1-33, October.
  16. Youngjae Lim & Robert Townsend, 1998. "General Equilibrium Models of Financial Systems: Theory and Measurement in Village Economies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 59-118, January.
  17. Udry, Christopher, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 495-526, July.
  18. Paxson, Christina H, 1992. "Using Weather Variability to Estimate the Response of Savings to Transitory Income in Thailand," American Economic Review, American Economic Association, vol. 82(1), pages 15-33, March.
  19. Neil Gandal, 1994. "Hedonic Price Indexes for Spreadsheets and an Empirical Test for Network Externalities," RAND Journal of Economics, The RAND Corporation, vol. 25(1), pages 160-170, Spring.
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