Self- and Social Signaling: Evidence from Solar Adoption in California

Prosocial behavior plays a role in many economic contexts, and it has been explained by altruism, social pressure, signaling, and expectations of fairness and reciprocity. We examine prosocial behavior in a context that allows us to distinguish the role of self-signaling and social signaling from alternative explanations, including warm glow. Our context is residential solar, and self-signaling is separately identified from social signaling by the exogenous visibility of potential solar arrays. We show that the political affiliation of proximate peers influences the extent of self-signaling and is crowded out by the private benefits of installing solar.