Identifying Peer Effects in Solar Panel Adoption (IPESPA)

Abstract:

Moving to renewable sources of energy is a key societal challenge and much of this transition has to happen at the individual level, e.g. by rooftop-installation of solar panels. This project uses a uniquely constructed dataset that links household-level data on photovoltaic adoption with registry data depicting individuals’ social networks to study the role of peer effects in the context of investments in renewable energy. Identification problems related to causal estimation of peer effects are addressed with a method that exploits partially overlapping peer groups. The project contributes to the economic literature on peer effects by testing i) for the relative strength of different transmission channels (neighbors, family, and colleagues), ii) how receiver- and sender-side characteristics (economic status, connectedness, and education) moderate the peer effect, and iii) how conspicuousness affects the peer effect (solar panels visible from the street).Social ties influence many economic outcomes. Our friends and peers influence how we behave, what education we obtain, what careers we pursue, and even whom we marry. Connections between business partners are formed using knowledge from prior interactions. Employers and employees use their social contacts for obtaining information about each other. And more and more of these ties are created and maintained in online social networks. Given their importance in many different contexts, different scholarly communities have been engaged in the study of peer effects, including economics, management, and information systems. The goal of this project is to create a multidisciplinary forum that brings together scholars from the fields of economics, management, law, and information systems. In collaboration with a group of highly renowned European scholars (Stefan Bechthold from ETH Zürich, Dietmar Harhoff from the Max Planck Institute for Innovation and Competition and Tobias Kretschmer from the University of Munich), I plan to organize a summer institute with a similar format as the summer institute organized by the National Bureau of Economic Research (NBER). The goal of the summer institute is to stimulate a rigorous in-depth discussion of a select number of research papers and to strengthen the interdisciplinary international research community in these areas. All papers will be presented in plenary sessions, with 45 minutes per paper allowing for an in-depth discussion of the paper both by the audience as well as by one invited discussant.