Do peer effects matter? Assessing the impact of causal social influence on solar PV adoption

Published: September 13, 2012

By Bryan Bollinger, Assistant Professor of Marketing, NYU Stern School of Business; Kenneth Gillingham, Assistant Professor of Environmental and Energy Economics, Yale School of Forestry and Environmental Studies

In this paper an assessment is made of the impact of causal peer effects found in a recent paper by Bollinger and Gillingham, simulating solar adoption over many markets in the presence of a causal peer effect. Heterogeneity in both the peer effect and the baseline adoption rate is introduced and their interaction assessed. The nature of the heterogeneity and the size of the peer effect both have implications for the resulting diffusion process. Causal peer effects have implications for firms and policymakers, who have the ability to utilize social spillover effects in their marketing activities in order to increase and expedite solar adoption.

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