Jevons Paradox

In the comments section of this post on Cafe Hayek, commenter Mommsen1625 points out that the tendency to consume more of a resource as the usage of that resource becomes more efficient is known as Jevons Paradox.

I’ve known about this effect for a long time, but I didn’t know its name.  I credit a Peter Huber Forbes column from the ’90s for educating me of this truism, but either I forgot about the name or never new it had one.  Now I do.  That’s good because a named paradox is much easier to communicate and has more authority.

In practice it works like this.

As we’ve made cars more fuel efficient, we tend to find ways to drive further and use more gas than we did before because we can afford to.  Maybe we choose to live further from work, we take more frequent trips to the grocery store or take a few more weekend road trips than we would have if fuel usage was less efficient.

I replaced my 1984 high efficiency home air conditioning unit a few years ago with a modern high efficiency unit.  I saw my bills go down initially, but then I cranked the temperature down a couple degrees to bring the bill back up to the previous levels and enjoy a cooler and more comfortable home.

As we’ve gained efficiency in operating homes with improvements in appliances, insulating materials, better windows and so forth, we’ve made bigger homes and filled those homes with gadgets like flat screen TVs that consume more energy.

I have nothing against improving the efficiency of anything.  The problem is believing that will lead to conservation of a resource.  In reality, the efficiency is more often translated to an improvement in lifestyle rather than a reduction in resource usage.

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