Jevons effect
Technology Development leads to Resource Cost optimization, which increases Demand rather than reducing Resource usage
When technology dramatically increases productivity in a specific industry, prices fall and quality improves. As a result, people consume much more, causing the overall industry size to actually grow larger.
The Jevons effect creates wealth, while the Baumol effect distributes that wealth throughout society.
Why AC is cheap, but AC repair is a luxury
The Baumol Effect and Jevons paradox are related
https://a16z.substack.com/p/why-ac-is-cheap-but-ac-repair-is

AI Doesn’t Reduce Work—It Intensifies It
One of the promises of AI is that it can reduce workloads so employees can focus more on higher-value and more engaging tasks. But according to new research, AI tools don’t reduce work, they consistently intensify it: In the study, employees worked at a faster pace, took on a broader scope of tasks, and extended work into more hours of the day, often without being asked to do so. That may sound like a win, but it’s not quite so simple. These changes can be unsustainable, leading to workload creep, cognitive fatigue, burnout, and weakened decision-making. The productivity surge enjoyed at the beginning can give way to lower quality work, turnover, and other problems. To correct for this, companies need to adopt an “AI practice,” or a set of norms and standards around AI use that can include intentional pauses, sequencing work, and adding more human grounding.
https://hbr.org/2026/02/ai-doesnt-reduce-work-it-intensifies-it


Seonglae Cho
