A New Multivariate Product Growth Model
Tinbergen Institute Discussion Paper No. 06-027/4
25 Pages Posted: 27 Mar 2006
Date Written: March 15, 2006
To examine cross-country diffusion of new products, marketing researchers have to rely on a multivariate product growth model. We put forward such a model, and show that it is a natural extension of the original Bass (1969) model. We contrast our model with currently in use multivariate models and we show that inference is much easier and interpretation is straightforward. In fact, parameter estimation can be done using standard commercially available software. We illustrate the benefits of our model relative to other models in simulation experiments. An application to a three-country CD sales series shows the merits of our model in practice.
Keywords: Diffusion, international marketing, econometric models
JEL Classification: C39, M31
Suggested Citation: Suggested Citation