6 ms·

I'm not sure why this gets a special term. It sounds like basic supply and demand. If you decrease the price of something by increasing the efficiency of produc

by hueving 10y ago

I'm not sure why this gets a special term. It sounds like basic supply and demand. If you decrease the price of something by increasing the efficiency of production, you will obviously capture more of the demand curve. What am I missing?

abraae 10y ago
By giving it a special term, additional commentary/analysis can coalesce around it, such as that "governments and environmentalists generally assume that efficiency gains will lower resource consumption, ignoring the possibility of the paradox arising".
daveguy 10y ago
Well, if you'd follow the link you'd see that Jevons identified this phenomenon in the mid 1800's with respect to coal usage. It probably wasn't so obvious then.
SilasX 10y ago
A lot of people naively assume that if you can use a resource more efficiently, then total use will go down, "because you don't need as much, right?" See: the entire popular support for efficiency mandates. (Edit: Also, this very example -- I certainly didn't expect that a faster site would allow that many more users: my model was more "either they want to see your site, or they don't", i.e. inelastic demand.) The (common) error is to neglect the additional uses people will put a resource to when its cost of use goes down. ("Great news! We get free water now! Wha ... hey, why are you putting in an ultra-thirsty lawn??! You don't need that!") Also, I wouldn't call it basic supply and demand; depending on the specifics (inelasticiy of demand, mainly), total usage may not actually go up with efficiency.
- nommm-nommm 10y ago
  This sounds like the reason widening roads doesn't usually ease congestion. Which, really, can be summed up by my favorite Yogi Berra-ism "No one goes there nowadays, it’s too crowded."
  - AnthonyMouse 10y ago
    > This sounds like the reason widening roads doesn't usually ease congestion. It usually does actually. What is happening there is that you have different demand levels at different congestion levels. If you alleviate some congestion by widening the road then demand goes up. That is only a problem if the demand without congestion is higher than what even the wider road can handle. As long as the new road can handle the higher but still finite demand you get when there is no congestion, there is no problem. In other words, as long as you make the road wide enough for the congestion-free demand level to begin with, that doesn't happen.
    - SilasX 10y ago
      That's technically true, but it assumes away the core, ever-present problems: - It may not be physically possible to add enough lanes to e.g. handle everyone who would ever want to commute into L.A. - Even if that road was correctly sized, it still has to dump the traffic into the next road, through the next intersection point. If you've increased the capacity of the freeway but none of smaller road networks that the traffic transitions to, you've just moved the bottleneck, not eliminated it. And that too may be physically impossible. In any practical situation car transportation efficiency does not scale well enough that you can avoid addressing the demand side.
      - AnthonyMouse 10y ago
        It isn't physically impossible to use eminent domain to seize all the property around the roads and then build 32 lane roads all over Los Angeles. That is a separate question from how stupid that is in comparison to the alternative of building higher density residential housing closer to where people work and with better mass transit. But if people don't want to do that either, you have to pick your poison. And there really are many cases (Los Angeles notwithstanding) where adding one lane isn't enough but adding two is and where that genuinely is the most reasonable option.
        ricardobeat 10y ago
- deleted 10y ago
  [deleted]
- TeMPOraL 10y ago
  Scott Alexander has some examples of that in his post: http://www.scottaaronson.com/blog/?p=418 http://www.scottaaronson.com/blog/?p=418 For example: > Why are even some affluent parts of the world running out of fresh water? Because if they weren’t, they’d keep watering their lawns until they were.
dogma1138 10y ago
Because it's easier to say somename effect than the half paragraph or so that describes it. This is the basic reason for naming anything after all a car is just a fossil fuel internal combustion kinetic comvertion wheeled people and goods pilotable transportation platform but saying a car is just easier :)
- deleted 10y ago
  [deleted]
DougBTX 10y ago
> What am I missing? The paradox is that they tried to reduce demand to reduce consumption, but accidentally reduced price, so increased consumption. The bit you're missing is that duality, that an action intended to reduce demand could reduce price instead. Applying rules of supply and demand happens as a step after categorising the action, that the action was miscategorised led to a misprediction.
throwaway91111 10y ago
To put it another way, marginal efficiency increased but total efficiency went down, which is (to some) unintuitive. It's certainly rare to observe!
- bonzini 10y ago
  I saw a similar effect with really fast disks. If you make the kernel faster at passing requests down to the disk, a simple benchmark with one request at a time will be faster. However, with many requests at the same time and less time spent processing then, you now have more time to poll the disk for completed requests. Each time the kernel polls the disk, it will typically see fewer completed request than before your optimizations, and overall this can actually result in decreased throughput.
CydeWeys 10y ago
> I'm not sure why this gets a special term. It gets a special term because it was coined in 1865, before most of modern economics was codified and this was a cutting edge finding. You may as well ask why Newton's laws get a special term, because they're all just obvious basic equations in physics that high school students are taught.
D_Alex 10y ago
The supply and demand "law" refers to the observation that the price of a good settles at a point where the available supply (which increases as the price goes up) matches the demand (which decreases as the price goes up). Jevons Paradox is only tangentially related. It is based on the observation that sometimes using a resource more efficiently results in higher overall consumption. For example, say 40 kg of lithium is needed for the batteries of an electric car. At some point, 4000 tonnes are produced annually, enough for 100,000 electric cars per year. Now a new battery comes on the market that needs only 20 kg of lithium. Should the lithium producers be worried that the lithium demand will drop, since only 2000 t will be needed for the 100,000 electric cars? Maybe. But if Jevons Paradox comes into play, the annual production of electric cars might triple as their cost drops due to lower lithium usage, and the new demand will then settle at 6000 tpa. So, paradoxically, reducing the amount of lithium in each battery could be good news for lithium producers. Whether or not Jevons Paradox occurs depends on the elasticity of supply-demand curves, in this case the curves for lithium and for electric cars.
- TeMPOraL 10y ago
  Not to mention that reducing the cost of batteries may lead to new classes of devices suddenly making sense as battery-powered (instead of corded or gasoline-powered), leading to increased demand for batteries.
arjie 10y ago
Well, that's because it's often not the case. Take the two cases: * Engines get more efficient (fewer litres per kilometre traveled). Does the total amount of petrol consumed go down or up? * Flushes get more efficient (less water / successful flush). Does the total amount of water consumed go down or up? Both of these have a more efficient use of a consumable quantity. Often, however, more efficient engines lead to more traveling and larger vehicles whereas more efficient flushing leads to reduced total water consumption usually. The fact that gains from efficiency can be outraced by the induced demand can be seemingly paradoxical. And "seemingly paradoxical" is the only thing that makes anything labelled "Paradox" interesting.
nebabyte 10y ago
That's like saying 'deadweight loss' "shouldn't be a term, because it's basic supply and demand". There's a clear and identifiable trend or pattern resultant of the general model, there's no reason not to assign it a shorthand way of being referred to in discussion or study.

by hueving 10y ago

abraae 10y ago

By giving it a special term, additional commentary/analysis can coalesce around it, such as that "governments and environmentalists generally assume that efficiency gains will lower resource consumption, ignoring the possibility of the paradox arising".

daveguy 10y ago

Well, if you'd follow the link you'd see that Jevons identified this phenomenon in the mid 1800's with respect to coal usage. It probably wasn't so obvious then.

SilasX 10y ago

A lot of people naively assume that if you can use a resource more efficiently, then total use will go down, "because you don't need as much, right?" See: the entire popular support for efficiency mandates. (Edit: Also, this very example -- I certainly didn't expect that a faster site would allow that many more users: my model was more "either they want to see your site, or they don't", i.e. inelastic demand.) The (common) error is to neglect the additional uses people will put a resource to when its cost of use goes down. ("Great news! We get free water now! Wha ... hey, why are you putting in an ultra-thirsty lawn??! You don't need that!") Also, I wouldn't call it basic supply and demand; depending on the specifics (inelasticiy of demand, mainly), total usage may not actually go up with efficiency.

nommm-nommm 10y ago
This sounds like the reason widening roads doesn't usually ease congestion. Which, really, can be summed up by my favorite Yogi Berra-ism "No one goes there nowadays, it’s too crowded."
- AnthonyMouse 10y ago
  > This sounds like the reason widening roads doesn't usually ease congestion. It usually does actually. What is happening there is that you have different demand levels at different congestion levels. If you alleviate some congestion by widening the road then demand goes up. That is only a problem if the demand without congestion is higher than what even the wider road can handle. As long as the new road can handle the higher but still finite demand you get when there is no congestion, there is no problem. In other words, as long as you make the road wide enough for the congestion-free demand level to begin with, that doesn't happen.
  - SilasX 10y ago
    That's technically true, but it assumes away the core, ever-present problems: - It may not be physically possible to add enough lanes to e.g. handle everyone who would ever want to commute into L.A. - Even if that road was correctly sized, it still has to dump the traffic into the next road, through the next intersection point. If you've increased the capacity of the freeway but none of smaller road networks that the traffic transitions to, you've just moved the bottleneck, not eliminated it. And that too may be physically impossible. In any practical situation car transportation efficiency does not scale well enough that you can avoid addressing the demand side.
    - AnthonyMouse 10y ago
      It isn't physically impossible to use eminent domain to seize all the property around the roads and then build 32 lane roads all over Los Angeles. That is a separate question from how stupid that is in comparison to the alternative of building higher density residential housing closer to where people work and with better mass transit. But if people don't want to do that either, you have to pick your poison. And there really are many cases (Los Angeles notwithstanding) where adding one lane isn't enough but adding two is and where that genuinely is the most reasonable option.
      - ricardobeat 10y ago
deleted 10y ago
[deleted]
TeMPOraL 10y ago
Scott Alexander has some examples of that in his post: http://www.scottaaronson.com/blog/?p=418 http://www.scottaaronson.com/blog/?p=418 For example: > Why are even some affluent parts of the world running out of fresh water? Because if they weren’t, they’d keep watering their lawns until they were.

dogma1138 10y ago

Because it's easier to say somename effect than the half paragraph or so that describes it. This is the basic reason for naming anything after all a car is just a fossil fuel internal combustion kinetic comvertion wheeled people and goods pilotable transportation platform but saying a car is just easier :)

deleted 10y ago
[deleted]

DougBTX 10y ago

> What am I missing? The paradox is that they tried to reduce demand to reduce consumption, but accidentally reduced price, so increased consumption. The bit you're missing is that duality, that an action intended to reduce demand could reduce price instead. Applying rules of supply and demand happens as a step after categorising the action, that the action was miscategorised led to a misprediction.

throwaway91111 10y ago

To put it another way, marginal efficiency increased but total efficiency went down, which is (to some) unintuitive. It's certainly rare to observe!

bonzini 10y ago
I saw a similar effect with really fast disks. If you make the kernel faster at passing requests down to the disk, a simple benchmark with one request at a time will be faster. However, with many requests at the same time and less time spent processing then, you now have more time to poll the disk for completed requests. Each time the kernel polls the disk, it will typically see fewer completed request than before your optimizations, and overall this can actually result in decreased throughput.

CydeWeys 10y ago

> I'm not sure why this gets a special term. It gets a special term because it was coined in 1865, before most of modern economics was codified and this was a cutting edge finding. You may as well ask why Newton's laws get a special term, because they're all just obvious basic equations in physics that high school students are taught.

D_Alex 10y ago

The supply and demand "law" refers to the observation that the price of a good settles at a point where the available supply (which increases as the price goes up) matches the demand (which decreases as the price goes up). Jevons Paradox is only tangentially related. It is based on the observation that sometimes using a resource more efficiently results in higher overall consumption. For example, say 40 kg of lithium is needed for the batteries of an electric car. At some point, 4000 tonnes are produced annually, enough for 100,000 electric cars per year. Now a new battery comes on the market that needs only 20 kg of lithium. Should the lithium producers be worried that the lithium demand will drop, since only 2000 t will be needed for the 100,000 electric cars? Maybe. But if Jevons Paradox comes into play, the annual production of electric cars might triple as their cost drops due to lower lithium usage, and the new demand will then settle at 6000 tpa. So, paradoxically, reducing the amount of lithium in each battery could be good news for lithium producers. Whether or not Jevons Paradox occurs depends on the elasticity of supply-demand curves, in this case the curves for lithium and for electric cars.

TeMPOraL 10y ago
Not to mention that reducing the cost of batteries may lead to new classes of devices suddenly making sense as battery-powered (instead of corded or gasoline-powered), leading to increased demand for batteries.

arjie 10y ago

Well, that's because it's often not the case. Take the two cases: * Engines get more efficient (fewer litres per kilometre traveled). Does the total amount of petrol consumed go down or up? * Flushes get more efficient (less water / successful flush). Does the total amount of water consumed go down or up? Both of these have a more efficient use of a consumable quantity. Often, however, more efficient engines lead to more traveling and larger vehicles whereas more efficient flushing leads to reduced total water consumption usually. The fact that gains from efficiency can be outraced by the induced demand can be seemingly paradoxical. And "seemingly paradoxical" is the only thing that makes anything labelled "Paradox" interesting.

nebabyte 10y ago

That's like saying 'deadweight loss' "shouldn't be a term, because it's basic supply and demand". There's a clear and identifiable trend or pattern resultant of the general model, there's no reason not to assign it a shorthand way of being referred to in discussion or study.