Thursday, 8 January 2009

Country groups for diffusion of different technologies

This post looks at the historic patterns of diffusion by country for various technologies. It uses principal components analysis to combine variables measuring each country’s technology level into a new set capturing most of the variation in as few variables as possible. These new variables are then stated in terms of their main country variable components. For example, if 50 percent of data variation in the prevalence of personal computer use is captured by the variables

0.4 x Italian rate + 0.7 x US rate + small contributions from other countries
0.5 x Canadian rate + 0.8 x UK rate + small contributions from other countries

we would identify personal computer use as described by the shared expansion in groups consisting of Italy and the US on one hand, and Canada and the UK on the other.

The data is from a new dataset entitled HCCTAD by Comin and Hobijn, available here. The dataset covers the ownership and use of around 30 technological products, both capital and consumer goods, for 23 developed countries for the last 250 years (with breaks). My analysis is restricted to the current members of the G7 leading industrialised countries.

The summarised results are in the table. The table shows the existence of clear diffusion groups in capital goods, but much more homogeneity in the spread of consumer goods. It may be that the conditions which determine capital good consumption are more internationally variable than consumer demand preferences.

No comments: