Visibility and Peer Influence in Durable Good Adoption

53 Pages Posted: 24 Jun 2019

See all articles by Bryan Bollinger

Bryan Bollinger

New York University (NYU) - Department of Marketing

Kenneth Gillingham

Yale University

A. Justin Kirkpatrick

Duke University

Steven Sexton

Duke University Sanford School of Public Policy

Date Written: June 14, 2019

Abstract

The underlying mechanisms of peer influence in durable good adoption can lead to substantial heterogeneity in peer effects and the capacity of marketers to leverage them. In this paper, we exploit the plausibly exogenous orientation of solar panels sited to maximize power generation to determine whether geographically proximate peers' solar installations increase a household's probability of solar adoption more if they are visible from public roadways. We also examine heterogeneity in the effect of peer panel visibility due to the economic value of solar installations and the political orientations of potential adopters. Highly visible and proximal peer solar installations are shown to double the adoption probability relative to non-visible proximal installations. The effect of peer installation visibility is larger for households headed by voters registered as independents or Democrats, who are only influenced by the visible installations of their non-Republican peers.

Keywords: peer effects, social interactions, diffusion, visibility, solar

Suggested Citation

Bollinger, Bryan and Gillingham, Kenneth and Kirkpatrick, A. Justin and Sexton, Steven, Visibility and Peer Influence in Durable Good Adoption (June 14, 2019). Available at SSRN: https://ssrn.com/abstract=3409420 or http://dx.doi.org/10.2139/ssrn.3409420

Bryan Bollinger (Contact Author)

New York University (NYU) - Department of Marketing ( email )

40 W 4th St
Tisch 804
New York, NY 10012
United States

Kenneth Gillingham

Yale University ( email )

New Haven, CT 06511
United States
203-436-5465 (Phone)

HOME PAGE: http://www.yale.edu/gillingham

A. Justin Kirkpatrick

Duke University

100 Fuqua Drive
Durham, NC 27708-0204
United States

Steven Sexton

Duke University Sanford School of Public Policy ( email )

201 Science Drive
Box 90312
Durham, NC 27708-0239
United States

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