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> Jevon's paradox is a special case of supply and demand, where people actually end up spending more money because something is cheaper. No, this isn't what Je
by vired 2mo ago
> Jevon's paradox is a special case of supply and demand, where people actually end up spending more money because something is cheaper.
No, this isn't what Jevons says. Jevons isn't concerned about money being spent on something, just total consumption of it. Whether more money or less is spent on it depends on the price elasticity of demand. Inelastic demand will lead to less money spent despite more of the resource/service/whatever being consumed. Elastic demand will lead to more money spent.
- dguest 2mo agoThat's fair, it actually has nothing to do with money. It's just saying that if $IN is more efficiently converted to $OUT, more $IN will be consumed. The original paradox was $IN = coal and $OUT = work, i.e. more efficient coal use increased coal use. With prices you have $IN = cash and $OUT = product: more efficient conversion of your cash to products can increase cash use. I was using this special case, but indeed the more general case doesn't have to involve cash at all.