Stormwater runoff is a growing non-point source pollution challenge that costs cities billions of dollars to fix. We investigate peer effects in a voluntary residential green stormwater infrastructure (GSI) program. Our identification strategy exploits households’ relative position in eligible sewer sheds as plausibly random variation in the number of potential peers. This exogenous variation in the number of eligible peers strongly impacts the number of peers that ultimately adopt. Our instrumental variable specification estimates that an additional peer adoption causes a 0.3% increase in the probability of signing up for RainWise in a given year, relative to a 0.4% baseline annual adoption probability. We investigate the mechanisms through which peer effects operate by examining heterogeneity in the type of GSI households and their peers install. Peer effects are technology-specific, suggesting that social interactions are an important component of the adoption decision. We also use the identification strategy to estimate how peer adoptions affect property values. We find limited evidence that neighbors’ adoptions increase property values. The results have implications for adoption of voluntary environmental programs and both the aggregate and distributional benefits of GSI policies.
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