Green spills: Peer effects in pro-environmental behaviors

Bigler, P. & Janzen, B. (2026). Green spills: Peer effects in pro-environmental behaviors. Journal of Public Economics 262 e105722. 10.1016/j.jpubeco.2026.105722.

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Abstract

This paper examines causal peer effects in pro-environmental behavior using geocoded panel data on 260,000 Swiss households from 2008 to 2019 and instrumental variables methods. We find that peer behavior has a simultaneous impact on a broad range of energy-related practices. In particular, we find that peer solar photovoltaic (PV) adoption increases household electricity conservation efforts, with each additional solar PV installation at 100 meters’ distance to a household reducing a household’s annual electricity consumption by 0.2%. We also document peer effects both within and across markets for pro-environmental durable goods, with increased uptake of solar PV and electric vehicles following new solar PV installations nearby. We find suggestive evidence that peer influence manifests itself in different ways contingent upon households’ constraints. Our findings have important implications for renewable energy subsidy evaluation. To illustrate this we calculate the marginal value of public funds (MVPF) of the existing solar PV subsidy scheme. In this setting, accounting for peer effects increases the estimated MVPF by approximately 17%.

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