Reverse Jevons Paradox
mht.wtf
mht.wtf
So if you give all your coders a great test harness and they run more tests because it takes up less of their time, that's not the Jevons paradox. If you give your coders a great test harness and then they go from spending 10% of work hours on testing to spending 20% of work hours on testing because testing has such a good ROI now, that's the Jevons paradox.
Meanwhile real Jevons is a very particular effect that doesn't show up on all road graphs and doesn't simply mean that opening up more lanes will attract more traffic.
People scoff at road construction (or rather, road widening) as a solution to congestion. I don't think anyone is under the impression that kilometers driven would go down as road bandwidth goes up.
>The road capacity led to more cars on the road, but also to more real demand being met.
No, not necessarily. Maybe some people who would have otherwise used public transport opt to drive instead. Making roads wider could literally make them less efficient, in terms of humans moved per hour per meter of width.
It is a solution to congestion because a part of the past congestion was that people were stuck at home and gave up on the trip overall, because it would take so long.
> Maybe some people who would have otherwise used public transport opt to drive instead.
Then presumably comfort increased. Also, add bus lanes.
That's not congestion. If someone opts not to make a trip, or uses a means of transport that doesn't use the road, such as a subway, then they didn't create road traffic. Congestion refers specifically to the failure of traffic to advance at an efficient speed along a thoroughfare.
>Then presumably comfort increased.
Again, "people scoff at road construction as a solution to congestion". Discomfort is not a component of congestion.
As the cost of attention goes down, and the cost of communicating bad ideas goes down, capturing attention with bad ideas paradoxically goes up.
Actually, Jevons Paradox is a pop-punk band from Birmingham that formed in 1997 but mostly disbanded in 2003 because of creative differences and (unofficially) the lead singers drug problems.
Not a lot of people know that.
I would argue that is not Jevons paradox but standard supply and demand (and this "reverse Jevons paradox" too). Jevons paradox occurs when a more efficient use of a resource leads to an increase in its use (instead of a decrease as a first order analysis would suggest).
Kinda yes. How do you derive total spend from supply-demand curves? Multiply price and quantity at an intersection point. Likewise, you can predict total spend by multiplying p and q on the demand curve.
The difference in total spend is difference between these areas. For the total spend to increase with a drop in price, the the demand must rise faster.
Jevon's paradox implies that the price equilibrium is at the highly elastic portion of the demand curve.
> Jevons paradox occurs when a more efficient use of a resource leads to an increase in its use
While that's mostly true in practical reality in established economies, that does not strictly have to be the case. On the consumer side, especially in manufacturing, there's very little difference between unit price of a good falling and input unit per output units dropping as both lead to decreased COGS. In both cases, market realities might unlock alternative approaches (the classic being robot replacing Robert), leading to increased demand.
I think these are the same, because efficiency is value over cost. In the original formulation of the paradox, a more efficient steam engine lead to a rise in coal consumption. You can look at this as a "money buys coal, coal drives locomotion" system, where the latter part was improved. Modulo practical issues with coal (transport, storage, etc), dropping the price of coal would (probably?) lead to the same effect, since the end result is that locomotion per money is increased. For an outside observer, it doesn't matter if you get more coal per money or more locomotion per coal.
> standard supply and demand
Standard supply and demand doesn't say anything about increase of spend. If food prices drop, I'm not going to buy more food. I might buy better food for the same budget, but there's no reason why my total food spend should increase.
Not for perishables, but for non-perishables.
Jevon's paradox is a special case of supply and demand, where people actually end up spending more money because something is cheaper.
It's interesting because consumption then grows in unpredictable ways: it can drive innovation even in cases where markets are constrained by monopolies, for example, where in non-Jevons cases producers would have no incentive to lower prices.
The example I've heard given is accounting and spreadsheets. It made accountancy cheaper, but people then started asking more questions and analysis became a thing.
Rather than just taking the reduced spend as profit, companies wound up increasing their accountancy spend overall.
What would the food example be? Vanilla ice cream going from a rarity only the rich could afford, to a standard desert for all when the synthetic form was invented?
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.
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.
Imagine yourself a shop keeper, hoping to boost the money coming in at the till. If you increase prices by 10%, you will get more? Right?
That depends on the elasticity of demand. If the elasticity is two, the drop in demand is twice the increase in price. 0.8 times 1.1 is 0.88. Takings fall from $100 to $88.
But if the elasticity is one half, the drop in demand is half the increase in price. 0.95 times 1.1 is 1.045. Takings rise from $100 to $104.5.
When the price goes up the shop always sells less goods, (Law of Demand) but that still leaves it unclear whether more or less money goes in the till. This is first year University economics today.
Back in 1865, it was obvious to every-one that the increased efficiency of steam engines would lead to a reduced demand for coal. Jevons pointed out that increased efficiency makes steam power cheaper. Goodbye water wheel, hello steam engine. More steam engines, greater consumption of steam power, any-one who wants to make a prediction needs to invent the concept of elasticity and try to measure it. Greater than one? Less than one? That is going to decide whether total demand rises or falls.
Well, in that case you're talking about an entirely different phenomenon. Jevons's paradox (as defined by this post) happens when the cost of a resource decreases and the spend on that resource increases. You're talking about what happens to the spend on resource A when the cost of resource B decreases. Whether it rises or falls, it won't be Jevons's paradox.
The law of demand frames demand as a function of price and utility — demand is monotonically non-decreasing with utility (the more useful it is, the more people want it), and monotonically non-increasing with price (the pricier it is, the less people want it), but e.g. Giffen goods and Veblen goods break the "monotonically non-increasing with price" assumption of the law of demand.
You can add efficiency to that equation — demand is a function of price, utility and efficiency, and it is also monotonically non-increasing efficiency (The less of it you need, the less people want it). If you could get twice as much saltiness from table salt, you'd cut down demand by 50%.
The Jevons paradox is about the cases where demand isn't non-increasing with efficiency, because utility is itself a function of efficiency. Increased efficiency directly lowers demand, but, because it increases utility, it also increases demand indirectly.
The paradox is usually framed as more efficiency -> more demand (because of the intermediate "more utility" step), but the author is framing it in the opposite direction, as less efficiency -> less demand (because of the intermediate "less utility"). I would argue it's just that the paradox works both ways, rather than calling it a "reverse", but that's me.
No you are right, it's the same paradox, not some distinct reverse form. If more x can cause more y, then it's logically equivalent that less x can cause less y.
I remember this theater on things which were suspected to be too expensive with insiffiufficient ROI to implement, except that all the time wasted by multiple people arguing in Jira tickets, sitting in meetings, and writing specifications was likely far more expensive than just building and testing the thing.
For some reason, there seems to be a strong and automatic tendency for older and larger organizations to drift toward petrification through bureaucratization.
An example not anchored in anything: If public transit costs x, I'll use it every day. If public transit suddenly costs 2x, I'm not gonna use it every other day, I'll rather find an alternative and use 0.
Or the changes might be "smuggled through" in an unrelated changeset that has to go through the red tape anyway.
There is a class of changes that take very little time but have a positive impact. If the cost of making a ticket for that change exceeds the cost of the ticket, it's human nature that some people just won't make the change.
This is a bit of a contrived example (e.g. you could bundle multiple small changes into one ticket) but it's still a good example of a policy meant to make things better actually leading to fewer improvements.
- Dad, dad, have you seen - the prices went up so much! Does this mean you will stop drinking now?
- No son, this means you will eat less.
That's called Software Engineering at Google
> If you pay $1.00 to press a button, and pressing the button pays you $0.99, you > will press the button zero times. If you get $1.01 instead, you will press the > button all the time.
One thought: If it only gives you $0.01 profit you'll (have to) push it more than if it gave you $1000 profit. There's a saturation point.
This is tautologically true in the limiting case of infinite cost.
It leads to an interesting way to think about company and civic health as well. Instead of focussing purely on incentives, one might assume that many are inclined to do good stuff anyway, and then ask: are we lowering the cost of all desired behavior as much as possible? And are we doing it for as many people as possible?
It seems like there’s a straightforward/obvious corollary that reverses the sign on both clauses. (Walk the curve in the opposing direction.)
Not unlike hiking taxes on the rich, seeing them vote with their feet, and revenue subsequently catering.
But as long as we reward politicians for delivering blame more than results, this political folly will continue.
Until Strein's Law[1] kicks the teeth in.
Moreover, when the destination jurisdiction does use a different currency, that increases demand for the destination currency and reduces demand for the original currency, i.e. it devalues the original currency. And then even if your revenue was the same in nominal dollars it would have declined in real dollars.
On top of that, non-uniform tax rates break your model wide open. The entities who leave can exchange their currency (independently of whether it gets devalued) for assets, so that the amount of currency (as distinct from wealth, since it's an equal value exchange) increases in the hands of the people who pay lower tax rates. Which likewise has a negative impact on revenue, since they pay lower tax rates.
... must be a satire post, right? This is just the most plain and intuition result.