Status emulation in a good cause

Thorstein Veblen wrote that status emulation was a very powerful human motivation—second only to the survival instinct and sometimes not even in second place.  I remember when I read his description of folks being "well-dressed but ill clad" and thinking of some of the more extreme examples I had encountered while driving taxis during college.  On bitterly cold nights I would pick up women at places like Orchestra Hall who had on skimpy cocktail dresses and very expensive high-heeled shoes that were not exactly a good match for icy sidewalks.  Cast out in the elements, they probably had a life expectancy of less than five minutes but damn, they looked good.

It was observations like this that made me a lifelong fan of Veblen's.  Not only did he have deep insights into how humans made many of their economic choices, these insight were often extremely prescient.  I have often wondered what Veblen would say if could see what television advertising has done to status emulation.  But if status emulation can sell off-road trucklets to suburban housewives who will never even venture down strange alleys, I would imagine it can be used to sell PV panels.  And now we see that there are studies that show such outcomes can already be demonstrated.

If Your Neighbor Has Solar Panels, You’re More Likely To Go Solar (Solar Power Is Contagious)

OCTOBER 18, 2012 BY NATHAN

Someone is considerably more likely to install solar panels on their home if others in their area have already installed them, according to new research from Yale and New York University.

The research was done by studying different clusters of solar panel installations in California from January 2001 to December 2011. The researchers found that residents are much more likely to install solar panels if they are already installed in their zip code, and particularly if they are installed on their street.

“We looked at the influence that the number of cumulative adoptions — the number of people who already installed solar panels in a zip code — had on the probability there would be a new adoption in that zip code,” said Kenneth Gillingham, the study’s co-author and assistant professor of economics at the Yale School of Forestry & Environmental Studies. “Our approach controls for a variety of other possible explanations, including clustering of environmental preferences or marketing activity.”

The results were pretty significant, just 10 extra solar installations in a zip code made it 7.8% more likely that someone would install them themselves. And with just a 10% increase in the number of people within a zip code to have solar installations, there will be a 54% increase in the number of those going solar.

“These results provide clear evidence of a statistically and economically significant effect,” said Bryan Bollinger, the other co-author and assistant professor of marketing at New York University Stern School of Business.

The study also clearly shows what led to the increase: visibility and word-of-mouth. “If my neighbor installs a solar panel and tells me he’s saving money and he’s really excited about it, it’s likely I’ll go ahead and do the same thing,” said Gillingham. “Then there are others who’ll install because they don’t want to be one-upped by their neighbors.”  more