Toward an Economic Theory of Media Diffusion Based on the Parameters of the Logistic Growth Equation

This article suggests that the logistic growth equation is the model underlying media diffusion. The logistic is shown to be a good fit to the diffusion of U.S. communication media such as radio, TV, cable, VCR, and the home computer. This article proposes that the r and K parameters of the logistic can be interpreted, respectively, as anticipated gratification utilities and economic conditions. In addition, the results of hypothesis testing showed that step variables representing changes in anticipated gratification utilities were related to the diffusion of cable and the personal computer. A hypothesis predicting a relation between disposable income and diffusion of U.S. communication media was supported only for the personal computer. We believe further research should attempt to measure variables representing r and K at the individual or household level.

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