doi 10.1287/mksc.1040.0054 ©2004 INFORMS Social Contagion and Income Heterogeneity in New Product Diffusion: A Meta-Analytic Test

Standard diffusion models capture social contagion only coarsely and do not allow one to operationalizedifferent contagion mechanisms. Moreover, there is increasing skepticism about the importance of contagion and, as has long been known, S-shaped diffusion curves can also result from heterogeneity in the propensity to adopt. We present hypotheses about conditions under which specific contagion mechanisms and income heterogeneity are more pronounced, and test these hypotheses using a meta-analysis of the q/p ratio in appli-cations of the Bass diffusion model. The ratio is positively associated with the Gini index of income inequality in a country, supporting the heterogeneity-in-thresholds interpretation. The ratio also varies as predicted by the Gamma-Shifted Gompertz diffusion model, but the evidence vanishes after controlling for national culture. As to contagion, the q/p ratio varies with the four Hofstede dimensions of national culture—for three of them in a direction consistent with the social contagion interpretation. Furthermore, products with competing standards have a higher q/p ratio, which is again consistent with the social contagion interpretation. Finally, we find effects of national culture only for products without competing standards, suggesting that technological effects and culturally moderated social contagion effects might not operate independently from each other. Key words: diffusion of innovations; social contagion; income heterogeneity; national culture; meta-analysis History: This paper was received July 30, 2003, and was with the authors 1 month for 1 revision; processed by Gary Lilien. 1