Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/57562 
Year of Publication: 
2011
Series/Report no.: 
Papers on Economics and Evolution No. 1110
Publisher: 
Max Planck Institute of Economics, Jena
Abstract: 
How can economic theory explain the reasons why consumers adopt innovations? Using the example of innovations in washing machines two approaches are compared. The first focuses in the manner of household production theory on changes in constraints without specifying preferences, leading to the well-known time substitution hypothesis. The second approach develops specific hypotheses about consumer preferences and focuses on how technical change accounts for them. The two approaches are empirically evaluated with a data set representing the motives suggested in washer advertisements for purchasing new vintages of machines over the period 1888 to 1989 in the US.
Subjects: 
home production
preferences
consumer motivation
product innovation
innovation diffusion
time substitution hypothesis
direct utility
JEL: 
A12
D01
D11
D12
D13
N3
Document Type: 
Working Paper

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