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Adoption Patterns and Implications

Adoption Patterns and Implications. May 5, 2010 Sari Radin, Jennifer Michaels, and David Pace. Overview. Markets. Highway data collection (HDC) Electronic toll collection (ETC) Traffic management software (TMS) Vehicle data collection (VDC) Emergency vehicle pre-emption (EVP)

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Adoption Patterns and Implications

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  1. Adoption Patterns and Implications May 5, 2010 Sari Radin, Jennifer Michaels, and David Pace

  2. Overview

  3. Markets • Highway data collection (HDC) • Electronic toll collection (ETC) • Traffic management software (TMS) • Vehicle data collection (VDC) • Emergency vehicle pre-emption (EVP) • Transit signal priority (TSP)

  4. Agency Behavior An agency’s adoption of technology is a function of: • Agency specific characteristics • Congestion problem • Budget issues • Federal, state, local • Earmarks • Regional Architecture • Accidents/Safety concerns • Network effects • Spillovers from other “neighbor/peer group” agencies • Prices • Cost of the technology

  5. Modeling Agency Behavior with the “ITS JPO Deployment Survey Data” • Panel model • Observations of agencies over 7 years • Fixed effects model – controlling for individual effects • Network effects • Selection using gravity theory criteria of distance and similarity. • Peer groups • Neighbors • Similar to them

  6. Peer Group Relationshipwhere peer group is defined by similarity in terms of congestion Adoption by similar agencies Time = t Time = t+1

  7. Step 1: Selection of peer group using distance and similarity criteria Step 2: Insertion of time varying and agency varying explanatory variables, including peer group adoption Step 3: Estimate Estimation

  8. Results : Highway Data Collection • If the state revenue INCREASES by $10,000,000 million, then 3.76 MORE miles will be monitored by HDC by every agency in that state. (avg state revenue is $116,000,000 million) • If the cost of loops INCREASES by $1,000, then 29.35 FEWER miles will be monitored by HDC by every agency in that state. • If congestion RISES from 1.3 to 1.4 (Phoenix to DC), then 36.4 MORE miles will be monitored by HDC by every agency in that state. ↑ ↓ ↑

  9. Results : Electronic Toll Collection (ETC) ↑ • ↑ ↓** • If the state revenue INCREASES by $100,000,000 million, • then 9 MORE lanes will have ETC. • If the peer group adoption rate INCREASES from 70% to 80%, then 14.2 MORE lanes will have ETC. • If congestion RISES from 1.3 to 1.4 (Phoenix to DC), then 11.8 FEWER lanes will have ETC. **NOTE: congestion effect and similar peer effect are related, though not exactly the same thing. Increasing congestion with a peer effect in place means higher congestion than your average peer.

  10. Results : Traffic Management Systems (TMS) ↑ ↑ ↑ • If the county property taxes INCREASE by $10 million, then 0.722 MORE signals will be closed loop. (averages: property tax=$293mil, signals=171) • If the similar peer group adoption rate INCREASES from 70% to 80% then 18 MORE signals will be closed loop. • If the use by neighbors RISES from 70% to 80%, then 9.5 MORE signals will be closed loop.

  11. Results: Peer Effect

  12. The Peer Effect in Action: Denver (E-470 Public Highway Authority) & Peer Adoption Rates Agency lanes with ETC 1999 2000 2002 2004 2005 2006 60 60 70 100 104 104 67% 92% 100% 100% 100% Adoption Rate of Peer Group

  13. The Peer Effect in Action: San Diego & Peer Adoption Rates Closed Loop Signals (TMS) 2000 2002 2004 2005 2006 500 700 800 900 910 79% 85% 89% 90% 91% Adoption Rate of Peer Group

  14. Overall Market:Using the Bass Model to Identify • Growth and dissipation • Lead adopters, late adopters • Forces of innovation and imitation • Ways of affecting innovation and imitation

  15. Bass Model of Technology Diffusion New adoptions are a function of propensity to innovate and the reaction of imitators to the current market penetration rate: IMITATORS External Influence INNOVATORS P= coefficient of innovation Q= coefficient of imitation Source: (Mahajan, Muller, & Bass, 1990)

  16. Technology Diffusion : Emergency Vehicle Pre-Emption (EVP)

  17. Technology Diffusion : Transit Signal Priority

  18. Technology Diffusion: Vehicle Data Collection Peak Diffusion 2001

  19. Results: Summary of Bass Model

  20. What does it mean? Interpreting results and moving towards implications for • JPO • purchasing agencies • private sector

  21. Summary of all results • Positive impacts on adoption • Peer Effect, Revenues, Congestion • Negative impacts on adoption • Cost, only in some markets • Imitation driving diffusion more than innovation • All these markets appear to be in (or close to) a mature phase

  22. Using results to take action GOALS: • Gain a better understanding ITS markets • Identify actions within the context of the ITS Program to affect the markets to achieve departmental goals • Safety • Economic competitiveness • Sustainability • Livability • State of good repair

  23. What affects the market? The Federal government can: • Conduct outreach, training, provide technical info • Fund • Research • Issue regulations or guidance The Private Sector can make choices for: • Product development • Marketing and pricing Purchasers can: • Plan and prepare for purchases, understand options

  24. How the results inform outreach and marketing: peer effects • Adoption is affected by similar peers • Continue strategies like the peer to peer program, making special efforts to match agencies with similar peers where possible • Seek ways to encourage adoption by specific agencies in peer groups of interest. Use will spread. • Arterial agency ITS users’ adoption is affected by neighbors • If a program, such as Integrated Corridor Management, relies on adoption by neighbors, work to get at least one agency in the region to try the technologies. Others will follow.

  25. How the results inform outreach: cost results Adoption is affected by cost for • Highway data collection But not for • TMS • Electronic Toll Collection Our average cost data may not accurately reflect costs experienced by individual agencies. If so: • ITS JPO: Provide technical information on what affects costs • Purchasers:Learn about what affects costs for their particular situation while planning, and before negotiating the purchase of new technologies.

  26. How the results inform outreach and marketing: diffusion results • Bass model parameters from analogous products can be used to predict adoption ITS JPO: Seek to strengthen the imitation effects through peer to peer outreach and the innovation effects through technical guidance Private sector: Use existing diffusion parameters in new product planning and marketing

  27. How the results inform funding decisions Adoption is affected by an ongoing revenue stream Work for technologies to be eligible for ongoing funding under the next Federal authorizing legislation Adoption is not affected by one-time funds availability, such as earmarks Do not seek out a “deployment program” that distributes funds for isolated projects Cost matters for highway data collection, but does not matter for TMS or electronic toll collection Some form of cost sharing to lower the costs to the agencies could encourage adoption for technologies when adoption is significantly affected by costs.

  28. How the results inform research decisions • Technology markets examined are close to saturated ITS JPO: Sponsor research into new applications or technologies Private sector: Seek to develop new products, significantly improved products, or new applications • Agencies may be more price sensitive for technologies that are not core to their missions. ITS JPO: Environmental sustainability applications (AERIS) would need to be low incremental cost to purchasing agencies. This could be sought through research aimed at finding low cost solutions and integrating environmental benefits into core applications. Private sector: Seek to develop technologies that have lower costs and allocate costs more to purchasers buying core technologies.

  29. How the results inform regulation or guidance • Bass model parameters from analogous products can be used to predict adoption Use adoption predictions to assess whether there is a need and significant societal benefit to market interventions, such as regulatory requirements. May need additional analysis of diffusion patterns of technologies to understand the effects of different types of interventions. • The regional architecture requirement had no measurable effect on adoption. Use planning-related requirements to encourage appropriate use, but not to affect units of adoption.

  30. Next Steps for Project • Estimating models for remaining markets • Incorporate additional effects on agency behavior • Integration effects • Previous adoption by agency of other related technologies “Gateway technologies” • Peer effects • Varying criteria for similarity • Technology comparisons • Characteristics of technology like • Cost, • Benefits, • Substitutes … and how they affect adoption patterns

  31. Contact : Sari.Radin@dot.gov Jennifer.Michaels@dot.gov David.Pace@dot.gov ~Thank you~

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