Social interactions are widely understood to influence consumer decisions in many choice settings. This paper identifies causal peer effects in residential water conservation during the summer using variation from movers. We classify high-resolution remote sensing images to provide evidence that conversions of green landscaping to dry landscaping are a primary determinant of the reductions in water consumption. We also find suggestive evidence that without a price signal, peer effects are muted, indicating a possible complementarity between information and prices. These results inform water use policy in many areas of the world threatened by recurring drought conditions.
Bollinger, Bryan, Jesse Burkhardt, and Kenneth T. Gillingham.
"Peer Effects in Residential Water Conservation: Evidence from Migration."
American Economic Journal: Economic Policy,
Consumer Economics: Empirical Analysis
Gas Utilities; Pipelines; Water Utilities
Renewable Resources and Conservation: Water
Climate; Natural Disasters and Their Management; Global Warming
Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification