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Visibility and Peer Influence in Durable Good Adoption

Author

Listed:
  • Bryan Bollinger

    (Stern School of Business, New York University, New York, New York 10012)

  • Kenneth Gillingham

    (Yale University and National Bureau of Economic Research, New Haven, Connecticut 06511)

  • A. Justin Kirkpatrick

    (Department of Economics, Michigan State University, East Lansing, Michigan 48824)

  • Steven Sexton

    (Sanford School of Public Policy, Duke University, Durham, North Carolina 27710)

Abstract

The underlying channels through which peer influence operates in durable good adoption can affect the ability of marketers to leverage them. In this paper, we assess whether the visibility of peers’ adoption decisions leads to greater peer influence. The context we study is residential rooftop solar panels. We exploit the plausibly exogenous location and orientation of peers’ rooftop solar panels relative to proximate roadways and visual obstructions, such as vegetation, in order to determine whether geographically proximate peer installations increase a household’s probability of solar adoption more if they are visible from the road. We find that the total angle of visibility of peer installations on the same street positively affects solar adoption decisions at distances of at least 500 meters (m). In contrast, we only find a positive effect of nonvisible solar arrays within 100 m, which may be due to causal peer influence via other channels, such as word of mouth, or very localized unobservable effects. The effect of peer visibility is moderated by the economic value that the peers receive from installing solar, providing suggestive evidence of social learning through visual information.

Suggested Citation

  • Bryan Bollinger & Kenneth Gillingham & A. Justin Kirkpatrick & Steven Sexton, 2022. "Visibility and Peer Influence in Durable Good Adoption," Marketing Science, INFORMS, vol. 41(3), pages 453-476, May.
    • Handle: RePEc:inm:ormksc:v:41:y:2022:i:3:p:453-476
    DOI: 10.1287/mksc.2021.1306
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    Cited by:

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    2. Garcia, Alberto & Heilmayr, Robert, 2024. "Impact evaluation with nonrepeatable outcomes: The case of forest conservation," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    3. Rhys Murrian & Paul A. Raschky & Klaus Ackermann, 2024. "Friends, Key Players and the Adoption and Use of Experience Goods," Monash Economics Working Papers 2024-17, Monash University, Department of Economics.
    4. O'Shaughnessy, Eric & Grayson, Alexandra & Barbose, Galen, 2023. "The role of peer influence in rooftop solar adoption inequity in the United States," Energy Economics, Elsevier, vol. 127(PA).
    5. Carattini, Stefano & Gillingham, Kenneth & Meng, Xiangyu & Yoeli, Erez, 2024. "Peer-to-peer solar and social rewards: Evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 219(C), pages 340-370.
    6. Karen Page Winterich & Rebecca Walker Reczek & Tamar Makov, 2024. "How lack of knowledge on emissions and psychological biases deter consumers from taking effective action to mitigate climate change," Journal of the Academy of Marketing Science, Springer, vol. 52(5), pages 1475-1494, October.
    7. Min, Yohan & Ko, Inhwan, 2023. "Causal effects of place, people, and process on rooftop solar adoption through Bayesian inference," Energy, Elsevier, vol. 285(C).
    8. Tanaka, Takuro & Mizutani, Fumitoshi, 2023. "Determinants of the adoption of energy efficient water heaters in the residential sector: Evidence from a survey in Japan," Energy Policy, Elsevier, vol. 180(C).

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