| The U.S. trunk airlines, during the 1970's, accomplished an extensive conversion of their aircraft fleet, the major part of their capital investment, to a new type of aircraft. Considering that the new "wide body" aircraft represented a new technology, the present study describes the patterns of and influences on its adoption, and the effects that it created upon the production function of the airlines.;The diffusion period of this innovation is modelled by the logistic function, yielding estimates of the date of origin, extent and rate of diffusion for each airline, and aircraft type. Differences between these measures across the instances of adoption are explained by influences such as the firm's financial characteristics, market structure, and the airline route structure.;In order to analyze the effects of technological change, an improved method of describing and measuring the changes in the production function was developed. It is based upon a series of successive production function estimates through the diffusion period for the innovation, and the calculation of changes across the estimates. The attempt is made to extend the possible channels of technological change, rather than consider only a few such as the rate and bias of innovation. It is shown that there are many channels of influence, including output elasticities, marginal products, bias and factor proportions, elasticities of substitution, returns to scale, and neutral efficiency. The impacts of an innovation need not be consistent for these aspects, and they represent concepts which can not be aggregated into a few measures of change.;Changes in the production function parameters, or in constructs of them, are analyzed in an application of the method to the airlines' adoption of the wide body aircraft. The translog production function was employed for eight estimates over the diffusion period of 1970-1977, for each calendar year. From the patterns of change of the production relations, a description of the nature of technological change for the airlines was developed.;The study provides information on the innovative performance of the airlines, an industry important in size and characteristics and on its influences. Improved estimates of airline production structure are made and the nature of technological change in the industry over the 1970's is thoroughly examined. A major contribution of the study is the alternative analysis of innovation and its ability to describe and measure the effects of technological change on the production relations. |
