What is Jevons Effect?

What is Jevons Effect?

What is Jevons Effect? Jonathan Poland

Jevons paradox, also known as the Jevons effect, is a phenomenon in which an increase in the efficiency of resource use leads to an increase in resource consumption, rather than a decrease. The paradox is named after economist William Stanley Jevons, who first described it in his 1865 book, “The Coal Question.”

Jevons observed that as the efficiency of steam engines improved, coal consumption actually increased, rather than decreasing as one might expect. He argued that this was due to the fact that improvements in efficiency led to a decrease in the cost of using coal, which in turn increased demand for coal. This increased demand offset the savings that were realized through improved efficiency, resulting in overall higher resource consumption.

Jevons paradox has been observed in a number of other resource consumption contexts, including energy use, water use, and transportation. For example, as cars become more fuel efficient, people may be more likely to drive more, leading to an overall increase in fuel consumption.

One of the key drivers of Jevons paradox is the rebound effect, which refers to the tendency of people to use more of a resource when it becomes cheaper or more convenient to do so. This can lead to a “rebound” in resource consumption, even when efficiency improvements have been made.

Jevons paradox highlights the importance of considering the broader economic and social factors that can influence resource. There are several factors that can contribute to the paradox, including:

  1. Decreased costs: As the efficiency of a resource increases, the cost of using it may decrease, making it more affordable and attractive to consumers.
  2. Increased convenience: Improved efficiency can also increase the convenience of using a resource, making it more appealing to consumers.
  3. Changes in behavior: Improved efficiency can also alter consumer behavior, as people may be more likely to engage in activities that they previously avoided due to the cost or inconvenience of using the resource.
  4. Indirect impacts: Improved efficiency may also have indirect impacts on resource consumption, such as increasing the demand for products or services that use the resource.
Learn More
Channel Pricing Jonathan Poland

Channel Pricing

Channel pricing refers to the practice of setting different prices for a product or service depending on the sales channel…

Exchange Rate Risk Jonathan Poland

Exchange Rate Risk

Exchange rate risk, also known as currency risk, is the risk that changes in exchange rates will negatively impact the…

Ingredient Branding Jonathan Poland

Ingredient Branding

Ingredient branding, also known as component branding or parts branding, is a marketing strategy that focuses on promoting the individual…

Barriers to Entry Jonathan Poland

Barriers to Entry

Barriers to entry refer to factors that make it difficult for new companies to enter a particular market. These barriers…

Public Capital Jonathan Poland

Public Capital

Public capital refers to the physical and intangible assets owned and managed by the government for the benefit of society.…

Boss Archetypes Jonathan Poland

Boss Archetypes

A boss is a person who manages and oversees the work of an organization, department, or team. The term “boss”…

What is a thought experiment? Jonathan Poland

What is a thought experiment?

A thought experiment is a mental exercise that involves exploring the implications or consequences of a hypothetical idea, story, or…

Digital Channels Jonathan Poland

Digital Channels

A digital channel is a means of distributing or selling products or services electronically, as opposed to through physical channels…

Reputational Risk Jonathan Poland

Reputational Risk

Reputational risk refers to the potential for damage to an organization’s reputation as a result of its actions or inactions.…

Latest Thinking

Qualified Small Business Stock (QSBS) Jonathan Poland

Qualified Small Business Stock (QSBS)

Qualified Small Business Stock (QSBS) refers to a special classification of stock in the United States that offers significant tax…

Barrick Gold Jonathan Poland

Barrick Gold

Barrick Gold Corporation (NYSE: GOLD) is a significant player in the global economy, particularly within the gold mining industry. Its…

Newmont Corporation Jonathan Poland

Newmont Corporation

Newmont Corporation (NYSE: NEM), being the world’s largest gold mining corporation, with extensive operations in mining and production of not…

Gold is Money Jonathan Poland

Gold is Money

Overview The history of gold as money spans thousands of years and has played a pivotal role in the economic…

What is Leadership? Jonathan Poland

What is Leadership?

In the modern business world, where rapid changes, technological advancements, and global challenges are the norm, effective leadership is more…

Product Durability Jonathan Poland

Product Durability

A durable product, often referred to as a durable good, is a product that does not quickly wear out or,…

Durable Competitive Advantage Jonathan Poland

Durable Competitive Advantage

The most important aspect of durability is market fit. Unique super simple products or services that does change much if…

Praxeology Jonathan Poland

Praxeology

Praxeology is the study of human action, particularly as it pertains to decision-making and the pursuit of goals. The term…

Business Models Jonathan Poland

Business Models

Business models define how a company creates, delivers, and captures value. There are numerous business models, each tailored to specific…