Motivation, Signaling and Peer Effects: Evidence from Rooftop Solar and Household Green Power Purchases

Abstract

I test whether economic incentives dampen peer effects in public good settings. I study how a visible and subsidized contribution (installing solar panels) affects peer contributions that are neither subsidized nor visible (purchasing green power). Exploiting spatial variation in the feasibility of installing solar panels and sharp changes in incentives over time, I find that panels increase purchases of green electricity by neighbors, and this crowding-in effect is smaller during high-subsidy periods. The results support the hypothesis that signals drive peer responses to visible public good contributions, and that economic incentives blur those signals.

Open Andrew La Nauze's paper (PDF, 1.7 MB)

About the presenter’s visit

Presented by Andrea La Nauze, University of Pittsburgh.

Dr Andrea La Nauze will be visiting the School of Economics on Friday 21 June 2019.  While here she will be using room 520A Colin Clark Building.  If you would like to meet with her or have lunch or dinner with her please contact Professor Claudio Mezzetti who will be her host while at The University of Queensland.  Professor Mezzetti can be contact on c.mezzetti@uq.edu.au.