Peer effects and inequalities in technology uptake. Evidence from a large-scale subsidy programme

31 March 2025
abstract:

The success of energy transition in addressing climate change depends on several factors, including the affordability of new technologies and the influence of peers within communities. However, concerns about affordability raise questions about how economic inequalities shape peer effects and whether they create barriers to equitable adoption. To this end, we explore how inequalities influence peer effects in the uptake of renewable heating sources. We leverage over 260,000 observations from unique and unpublished microdata from the Polish Clean Air Priority Programme – one of the largest retrofit schemes in Europe. Our results show that peer effects accelerate technology uptake, with each additional installation increasing the likelihood of subsequent adoption by 0.014 pp. Peer influence is affected by economic inequality. In more economically homogeneous regions, affluent individuals considerably impact their peers. In areas with higher economic disparities, this influence diminishes. Our findings highlight the role of heating technology type and adopter wealth in shaping peer effect magnitude. Less wealthy adopters of biomass stoves emerge as a significant driver of peer influence, especially in regions with lower income inequality. We advise direct transfers to address technology adoption inequalities, leveraging social capital in low-inequality regions and adopting individualised strategies in high-inequality areas.

keywords: inequalities, peer effects, energy transition, residential sector, renewable energy
JEL codes: 
publication year: 2025
language: english
Publications category: 
publishing series: IBS Working Paper
publication number: 03/2025
ISSN: 2451-4373
Additional information:

We thank Kamila Drzewiecka and Iwona Bojadżijewa from Client Earth for helping us access the data. This paper uses National and Regional Funds for Environmental Protection and Water Management and Statistics Poland data. Client Earth, the National and Regional Funds for Environmental Protection and Water Management, and Statistics Poland are not responsible for the authors’ results and conclusions.

Projects related to this publication:
 / 
authors:

Institute for Structural Research (IBS), University of Warsaw

Institute for Structural Research

Institute for Structural Research (IBS), Institute of Philosophy and Sociology Polish Academy of Sciences

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