Visibility and Peer Influence in Durable Good Adoption
53 Pages Posted: 24 Jun 2019
Date Written: June 14, 2019
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
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