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The Baumol Effect and Jevons paradox are related

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Re: The Baumol Effect and Jevons paradox are related

#51

Post by lkey »

MarkusQ wrote: post #31
lkey wrote: post #5

I don't think any 'interesting thought' that serves as a conclusion to an article should begin like so: | 'With radiologists, I’m totally speculating and I have no idea what the actual workflow of a radiologist involves...' Speculation from a place of ignorance is suitable for bar-side musings, not an article that wants us to take it seriously.

That's part of a quotation, as clearly stated in the article.

I'm well aware. My contention is that concluding with that supporting quote in particular was a mistake.

Re: The Baumol Effect and Jevons paradox are related

#52

Post by missedthecue »

nocoiner wrote: post #32
huevosabio wrote: post #24

``` Each of these phenomena have a name: there’s Jevons Paradox, which means, “We’ll spend more on what gets more productive”, and there’s the Baumol Effect, which means, “We’ll spend more on what doesn’t get more productive.” ``` I don't think that's exactly right. Jevons says "we consume more on what gets more productive" and Baumol says "the unit cost increases for that which is less productive". The typical examp…

The modern day example that really made Baumol click for me is child care, particularly day care. It’s a highly labor intensive with basically minimal opportunities for productivity enhancements (due both to regulation and parental preferences, as well as just baseline sheer human decency). As the rest of the economy becomes more productive, the relative cost of child care goes up and up and up - which is why we now…

Daycare economics are just brutal. It's insanely expensive to pay for, the caregivers make peanuts, and the owners are always at breakeven if they're not explicitly non-profit.

Re: The Baumol Effect and Jevons paradox are related

#53

Post by gruez »

lkey wrote: post #50
gruez wrote: post #28

Earlier quoted context omitted.

>The cost to use tokens is already zero or deeply negative, depending on your accounting ??? Sure, there's zero cost tokens in the form free chatgpt, but negative cost implies that you're getting paid to consume tokens, which I'm not aware of?

In the sense that OpenAI had ~$2.5 billion of revenue 2024 but likely spent ~$3.8 billion just on inference. Meaning they lose 50 cents for every dollar they spend to send you a token, more if you are a free user. This discounts employees, CapEx, real and imagined (1.4T), overhead, and training (subsidized by M$oft). Thus, if you have a way to turn every token they give you back into USD, even at a discounted rate, y…

That doesn't mean the cost is negative, it means the profit is negative for openai.

Re: The Baumol Effect and Jevons paradox are related

#54

Post by hackeraccount »

NoGravitas wrote: post #43
gruez wrote: post #25

Earlier quoted context omitted.

Drilling a few holes to mount a TV is so straightforward that nearly everyone can do it, in contrast to patching drywall, so excluding the cost of hiring a professional for that case is reasonable. Granted, you might be able to learn how to do it with some youtube videos, trips to home depot, and trial/error, but the cost of that will quickly exceed the cost of a handyman if you value your time at all.

Patching drywall is also so straightforward that nearly everyone can do it, unless it's a very large hole. It's a one trip to Home Depot or Lowes job.

Could you please do the patch the next time I get a hole in my dry wall? Every time I do it it's never really quite as good as I want. Nothing quite matches.

Re: The Baumol Effect and Jevons paradox are related

#55

Post by bryanlarsen »

nocoiner wrote: post #41
estearum wrote: post #37

Earlier quoted context omitted.

What productivity improvements would be possible if not for regulation?

For one, a higher child-to-caregiver ratio. There may be others, but this seems to be the easiest lever to pull to eke out some productivity gains. Personally, I’m completely fine with having this be the subject of regulation - even if it’s possibly an overly blunt instrument, this is not an area where I’d be comfortable letting the free hand of the market do its thing. Further, I suspect that universal, subsidized,…

Here you go. Quebec child care subsidy pays for itself: https://childcarecanada.org/documents/child-care-news/11/06/...

Re: The Baumol Effect and Jevons paradox are related

#56

Post by bryanlarsen »

parpfish wrote: post #16

that example of the radiologist review cases touches on one worry i have about automation with human-in-the-loop for safety. specifically that a human in the loop wont work as a safeguard unless they are meaningfully engaged beyond being a simple reviewer. how do you sustain attention and thoughtfully review radiological scans when 99% of the time you agree with the automated assessment? i'm pretty sure that no matte…

How to you sustain attention of the other big X-ray use: security scanning? Most scanners will never see a bomb, so how do you ensure that they'll actually see one when it does happen?

The answer they've come up with is periodic tests and audits.

Re: The Baumol Effect and Jevons paradox are related

#57

Post by parpfish »

missedthecue wrote: post #52
nocoiner wrote: post #32

Earlier quoted context omitted.

The modern day example that really made Baumol click for me is child care, particularly day care. It’s a highly labor intensive with basically minimal opportunities for productivity enhancements (due both to regulation and parental preferences, as well as just baseline sheer human decency). As the rest of the economy becomes more productive, the relative cost of child care goes up and up and up - which is why we now…

Daycare economics are just brutal. It's insanely expensive to pay for, the caregivers make peanuts, and the owners are always at breakeven if they're not explicitly non-profit.

so... where does the money go? is it insurance or have duplo block prices just gotten really out of hand?

Re: The Baumol Effect and Jevons paradox are related

#58

Post by qwertycrackers »

TekMol wrote: post #4

you accidentally knock a hole in your wall, it’s probably cheaper to buy a flatscreen TV and stick it in front of the hole What I recently did is that I 3D-printed an object with PLA that exactly fit the whole and just glued that in with assembly glue. What does the HN panel say? Is it a solution? Or does it have any downside?

It's a fine solution but surely just patching the drywall yourself wouldn't be that hard. It's really not a difficult process.

Re: The Baumol Effect and Jevons paradox are related

#59

Post by huevosabio »

parpfish wrote: post #57
missedthecue wrote: post #52

Earlier quoted context omitted.

Daycare economics are just brutal. It's insanely expensive to pay for, the caregivers make peanuts, and the owners are always at breakeven if they're not explicitly non-profit.

so... where does the money go? is it insurance or have duplo block prices just gotten really out of hand?

Landowners!

Re: The Baumol Effect and Jevons paradox are related

#60

Post by huevosabio »

CGMthrowaway wrote: post #48
huevosabio wrote: post #24

``` Each of these phenomena have a name: there’s Jevons Paradox, which means, “We’ll spend more on what gets more productive”, and there’s the Baumol Effect, which means, “We’ll spend more on what doesn’t get more productive.” ``` I don't think that's exactly right. Jevons says "we consume more on what gets more productive" and Baumol says "the unit cost increases for that which is less productive". The typical examp…

Going back to econ 101 & supply/demand curves: Jevons describes the supply curve moving out, resulting in increased quantity Baumol describes the supply curve moving back, resulting in higher prices

Yes, and in while Jevons is obvious why (efficiency changes the supply curve), Baumol is less apparent because the cause is more indirect.
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