Isolating the Determinants of Innovativeness: A Split-Population Tobit (SPOT) Duration Model of Timing and Volume of First and Repeat Purchase

Abstract

The authors present the Split-Population Tobit (SPOT) duration model to incorporate two conceptually distinct dimensions of innovativeness in a single framework, namely, the timing and volume of adoption. Rather than utilizing a diffusion model specification based on word-of-mouth and social contagion effects, the present approach uses a growth model specification and delineates a general function of time to describe the distribution of adoption timing. Estimation and several validation exercises performed on a data set describing the diffusion of personal computers across a sample of over 3000 U.S. firms provide strong support for the superiority of the SPOT model over models derived from restricted conceptualizations of innovativeness. The empirical work, albeit modest, tests the impact of covariates, such as firm-size and decision-centralization, on the dimensions of innovativeness and sheds light on some inconsistent findings in the innovation adoption literature. The authors subsequently derive the extended SPOT model (EXT-SPOT) to incorporate repeat purchase volume and timing in the SPOT framework. Finally, they discuss limitations, further research directions, and implications for the practitioner.