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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:

    1. 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).
    2. 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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