The Effect of Peer Comparisons on Polluters: A Randomized Field Experiment among Wastewater Dischargers

Abstract

Peer comparisons combine descriptive and injunctive messages about social norms. In experiments, these comparisons have encouraged pro-environmental behaviors among consumers. Consumers, however, are not the only sources of environmental externalities. Firms and other organizations also damage the environment. Yet organizations may not respond to peer comparisons in the same way that consumers respond because organizations have different objectives, constraints, and decision-making processes. In a pre-registered field experiment with 328 municipal wastewater treatment facilities in Kansas, we randomly sent some facilities a certified letter that contrasted, using text and a graphic, each facility’s discharge behavior to the behaviors of other facilities in the state. We estimate the effect of these peer comparisons on the degree to which the recipient facilities complied with discharge limits under the U.S. Clean Water Act. On average, letter recipients reported discharge ratios 8% lower than non-recipients in the eighteen-month period after letters were sent (95% CI [-15%, -1%]), although we cannot detect an effect in all post-treatment quarters. We believe that the results warrant further experimental replications and extensions to examine the cost-effectiveness of reducing pollution through peer comparisons.