This article presents a multilevel event history model of social diffusion and applies it to Coleman, Katz, and Menzel's (1966) data on the adoption of tetracycline by physicians. The simplest form of a multilevel model allows a random intercept. In the present application of this simple model to the Medical Innovation data, structured for an event history analysis, the physicians are nested in city and time. Random intercepts capture effects of contextual conditions that are shared by event history cases with the same city-time status. The intercepts also reflect any baseline internal contagion effects, that is, the proportion of physicians in the city-time network who have adopted the drug at time t-1. Here, I show that Van den Bulte and Lilien's (2001) finding of an important contextual effect of drug firms' marketing effort is misleading. I also show that the social network in which physicians are situated significantly contributes to their adoptions, controlling for baseline internal contagion effects and individual-level characteristics of physicians, which have been emphasized in investigations of these data.
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