Do Pilot and Demonstration Projects Work? Evidence from a Green Building Program

Pilot and demonstration (P&D) projects are commonly deployed to catalyze early adoption of technology but are poorly understood in terms of mechanism and impact. We conceptually distinguish unique functions of pilots and demonstrations, then examine whether they accelerate adoption in the case of green building technology. To identify effects on adoption, we develop a difference-in-difference-in-differences strategy, exploiting variation in timing, location, and technologies of green building P&Ds. Results indicate local quarterly green building adoption rates double following completion of a P&D project. Further analyses examine mechanisms driving this effect. The results suggest green building demonstration projects create learning externalities, proliferating technology diffusion in local markets and through building owner networks. Together, these results suggest that investments in P&D projects by public and private actors can lower costs for subsequent adoption.