Technological Innovation by Firms: Data Appendixes on Computers and Machine Tools
Jan 1, 1977
Enhancement of Product Quality
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Deals with the effect of technological innovation on product quality change. Several models sort out "technology push" from "demand pull" motivations. The first assumes that product quality can be captured by a scalar measure that is a function of performance dimensions. The second is based on the hedonic price index. Three other approaches are identified, two of which involve quality as a vector of several dimensions of a product. Finally, a product quality model could be devised based on each product's utility to users. Three models are subjected to empirical analysis using data for computers and milling machines. The "hedonic price index" approach seems to provide a better description than does the scalar model. The vector model of quality also shows promise. Choice among models is best made on the basis of analytical objectives for which product quality is being measured. (See also R-2237/1.)
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