> if the cost of a resource goes up, the total spend on that resource can go down
... must be a satire post, right? This is just the most plain and intuition result.
Reverse Jevons Paradox
31–40 of 63 posts
Re: Reverse Jevons Paradox
#32Earlier quoted context omitted.
Supply and demand says when something is cheaper (or produced more efficiently), people will use more of it. But the critical part is that it doesn't say people will spend more on it. 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 i…
So like buying the larger jar of jam that costs more than the smaller jar because the cost per ounce is less for the larger jar.
Not OP but yes if you consume more jam (not if you consume the same over a period of time, because you're then just paying less for jam over a wider time scale).
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.
Re: Reverse Jevons Paradox
#33Earlier quoted context omitted.
Supply and demand says when something is cheaper (or produced more efficiently), people will use more of it. But the critical part is that it doesn't say people will spend more on it. 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 i…
So like buying the larger jar of jam that costs more than the smaller jar because the cost per ounce is less for the larger jar.
Not exactly, unless you still wind up eating the larger jars at the same rate as the smaller ones.
Re: Reverse Jevons Paradox
#34> if the cost of a resource goes up, the total spend on that resource can go down. 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. [1] https://en.wikipedia.org/wiki/Herbert_Stein#Stein's_Law
Except that revenue doesn’t crater in a floating exchange rate system. Revenue from them craters but the money moves elsewhere and revenue improves there - including an increase in total transactions. Total revenue will always be Total spend less what people decide to financially save rather than spend. Because tax are percentages and the process is a geometric series.
"Vote with their feet" means relocating to another jurisdiction. The other jurisdiction doesn't necessarily have to use a different currency, e.g. if businesses move from California to Texas, they both use US dollars. Likewise any two countries that both use Euros.
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.
Re: Reverse Jevons Paradox
#35> Jevons paradox happens when the cost of a resource goes down, but the total spend on that resource goes up. 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).
Supply and demand says when something is cheaper (or produced more efficiently), people will use more of it. But the critical part is that it doesn't say people will spend more on it. 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 i…
You can rephrase it as the demand curve times the price (i.e. total spend on something vs the price) sometimes has a slope of less than -1.
Re: Reverse Jevons Paradox
#36> “if the cost of a resource goes up, the total spend on that resource can go down”
This is tautologically true in the limiting case of infinite cost.
Re: Reverse Jevons Paradox
#37Will it happen to memory? I am looking at you guys, electron apps.
A very old joke:
- 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.
Re: Reverse Jevons Paradox
#38I can’t tell if this is a troll post or not, but either way, the concept the author seems to be looking for is called the “Law of Demand” [0]. 0: https://en.wikipedia.org/wiki/Law_of_demand
exactly the Law of Demand, it is more intuitive
Re: Reverse Jevons Paradox
#39One of my favorite examples of this kind of thing is requiring a ticket for every change.
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.
Re: Reverse Jevons Paradox
#40One of my favorite examples of this kind of thing is requiring a ticket for every change. 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 i…
Not an issue for me anymore. I make a change, then tell the agent to make the ticket too. lol