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There are Free Lunches: Behavioral Clues to Live Happy in the Economic World is a blog that intends to present updated and relevant information about the "hidden" and only recently uncovered dimensions of the economic science: the behavioral factors. With this blog we intend to promote in Europe and in the rest of the World, the top research articles and perspectives on behavioral economics, decision making, consumer behavior, and general behavioral science. We aim to be followed by journalists, academics, managers, civil servants, and everyone who wishes to improve their daily interaction with the economic world and consequently, their lives' happiness.

Tuesday, 6 December 2011

Solar power is contagious — but not quite virulent (via The Washington Post)

There’s a new paper out from Bryan Bollinger of NYU’s Stern School and Kenneth Gillingham of Yale finding that, in California, solar power seems to be contagious. Having a bunch fo neighbors who are installing solar panels on their roofs makes a person more likely to try out solar for him- or herself. No surprise, peer pressure can be a powerful motivator. Specifically, the authors find, “a one percent increase in the zip code installed base leads to just over a one percent increase in the adoption rate.”

That explains why solar tends to cluster in specific California neighborhoods. (Interestingly, the authors note, the majority of solar adopters cite financial reasons, while only 26 percent say they’re installing panels out of concern for the environment.) But does it mean that rooftop solar adoption will eventually reach critical mass and trigger a fast chain reaction? John Farrell of the New Rules Project crunches the numbers and urges caution: “[I]f solar PV was being installed only once every 100 days at the outset, the peer pressure effect will take over 15 years to reduce the time between neighborhood installs to 10 days.” In other words, he says, “solar is contagious, but it’s not yet very virulent.”

You can check here the original paper and some extra data on the issue: SolarPowerPeerPressure

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