The diffusion of online shopping in Australia: Comparing the Bass, Logistic and Gompertz growth models

Abstract

The results of past studies that compared the performance of alternative growth models are generally inconclusive. The objective of the current study is to provide further empirical evidence regarding the performance of three popular growth curves, namely, the Bass, Logistic and Gompertz models in the context of online shopping diffusion in Australia. The results of model fitting to an online shopping time series (1998–2009) show that all three models represent the diffusion curve quite well and adequately; however, the Bass model described the online shopping diffusion curve more accurately than the other two models. Forecasting with early diffusion data (1998–2002) suggests that the Bass, Logistic and Gompertz models are unable to adequately describe the diffusion curve from limited data. Nevertheless, the Bass model with the adjusted market potential coefficient (m) produced forecast accuracy that is comparable to the Bass model fitted to the full data (1998–2009). Overall, our results suggest that the Bass model outperforms the Logistic and Gompertz models.