Product Evolution: What It Is and How It Can Be Measured

Abstract

The concept of product evolution applies to products changing physically over time, but serving the same function, e.g., the broom and dustpan being replaced by the vacuum cleaner. A new method of price linking, the representative good approach (RGA), is proposed for measuring product evolution using historical documents. The RGA can shed light on evolutionary patterns of technological change, and serve as a check against other methods of quality measurement like conventional price linking and hedonics. Using the SEARS CATALOG, dramatically-different rates of product evolution were estimated for cameras, fans and air conditioners, gas ranges, shoes, and sofas, from 1928 to 1993.