Jevons paradox

Coal-burning factories in 19th-century Manchester, England. Improved technology allowed coal to fuel the Industrial Revolution, greatly increasing the consumption of coal.

In economics, Jevons paradox is a paradox about resource usage. It is also called Jevons effect, after William Stanley Jevons who first observed it in 1865. Jevons observed that the steam engine James Watt had developed was much more efficient that the earlier model of Thomas Newcomen. Despite this, the use of coal in England increased. The improvements James Watt had introduced made coal a cheap source of energy. As a consequence, Watt's steam engine was more popular, and its use was more widespread. So even though each steam engine used less coal, the demand for coal increased, as there were more steam engines.

Jevons Paradox Media

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  William Stanley Jevons, after whom the effect is named

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  Elastic Demand: A 20% increase in efficiency causes a 40% increase in travel. Fuel consumption increases and the Jevons paradox occurs.

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  Inelastic Demand: A 20% increase in efficiency causes a 10% increase in travel. The Jevons paradox does not occur.