“It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth.“

—William Stanley Jevons, The Coal Question [1].

As a product manager, enhancing your product’s efficiency is often a primary goal. Improved efficiency can lead to cost savings, better performance, and increased user satisfaction. However, it’s crucial to understand the Jevons Paradox. This phenomenon occurs when increased efficiency leads to higher overall consumption. It can potentially negate the intended benefits.​

Understanding the Jevons Paradox

The Jevons Paradox is named after 19th-century economist William Stanley Jevons. In 1865, he argued that improving the efficiency of using a resource could actually lead to higher overall consumption. Jevons observed that as steam engine efficiency improved, coal consumption increased rather than decreased. The enhanced efficiency made coal a more cost-effective and attractive energy source. This led to its widespread adoption and greater total use. [1; 6]

In his book Jevons predicted that Britain would eventually run out of coal because of growing demand. Though he didn’t live to see it, coal production peaked in 1913—tripling since his time—then began a steady decline.

This pattern repeats today. For example, modern computers are 1 trillion times more energy-efficient than 1946’s ENIAC, yet global energy consumption for computation has skyrocketed due to data centers, smartphones, and IoT devices. Similarly, Bitcoin mining hardware became 1 million times more efficient since 2010, but the network’s energy use grew proportionally as miners expanded operations. [6]

This paradox highlights that individual efficiency improvements may reduce resource use and costs per unit. It can stimulate demand, leading to increased total consumption. In product management, this means that making a product more efficient can inadvertently encourage more usage. For product managers, this paradox is a critical lens to evaluate feature rollouts, user behavior, and long-term sustainability.​

Implications for Product Management

For product managers, the Jevons Paradox serves as a cautionary tale. When a product becomes more efficient, be it in energy consumption, processing speed, or user interface responsiveness, it often becomes more appealing to users. This heightened appeal can lead to increased usage patterns that may offset the gains achieved through efficiency improvements.​

Real-World Examples

1. Software Applications: Optimizing a software application to consume less bandwidth or processing power can make it more accessible to users with limited resources. However, this accessibility might encourage users to engage with the application more frequently or for longer durations, potentially leading to higher overall data consumption. [2]​
2. Mobile Devices: Enhancements in battery efficiency can extend device usage time. While this benefits users, it may also result in increased screen time, leading to faster battery depletion over the course of a day and potentially impacting user health and well-being. [3]​
3. Cloud Services: Improving the efficiency of cloud storage solutions can reduce costs and attract more users. However, the ease of storing data might encourage users to save more files than necessary, leading to an overall increase in storage demand and associated energy consumption. [4]​
4. Artificial Intelligence (AI): Advancements in AI algorithms have made them more efficient, reducing the computational resources required for training and inference. This efficiency lowers the cost of deploying AI solutions, encouraging broader adoption across various industries. Consequently, the total computational load and energy consumption may increase, offsetting the benefits of individual efficiency gains. [5]​

Strategies to Mitigate Unintended Consequences

To prevent efficiency gains from backfiring, product managers can consider the following approaches:

1. Monitor User Behavior: After implementing efficiency improvements, closely observe how user behavior changes. This can help identify unintended increases in usage and allow for timely interventions.​
2. Implement Usage Policies: Establish guidelines or limits that encourage responsible use of the product, even as it becomes more efficient. For example, introducing features that promote mindful engagement can help manage consumption patterns.​
3. Educate Users: Inform users about the potential impacts of increased usage and encourage practices that align with sustainability and well-being.​
4. Align Business Models: Ensure that the company’s revenue models do not solely depend on increased usage, which can exacerbate the effects of the Jevons Paradox. Exploring value-based pricing or subscription models can be alternatives.​
5. Incorporate Sustainable Design: From the outset, design products with sustainability in mind, considering the long-term implications of efficiency improvements on resource consumption.​
6. Policy Advocacy: Engage with policymakers to support regulations that mitigate the rebound effect. For instance, advocating for energy taxes or caps can help ensure that efficiency gains lead to actual reductions in consumption. [1]​

Conclusion

While pursuing efficiency is a commendable goal in product development, it’s essential for product managers to remain vigilant about the Jevons Paradox. By anticipating and mitigating potential rebound effects, they can ensure that efficiency gains translate into genuine benefits without unintended negative consequences. Balancing efficiency improvements with strategies to manage consumption is key to achieving sustainable and effective product growth.​

Works Cited

1. Jevons, William Stanley. The Coal Question: An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal Mines. Macmillan and Company, 1865. URL1: https://en.wikipedia.org/wiki/The_Coal_Question. Online Library of Liberty. URL2: https://oll.libertyfund.org/titles/jevons-the-coal-question.
2. Chitnis, Vallabh. “The Jevons Paradox in Product Management: A Double-Edged Sword.” LinkedIn, 2023. https://www.linkedin.com/pulse/jevons-paradox-product-management-double-edged-sword-vallabh-chitnis.
3. “The Smartphone Paradox: Efficiency in Your Pocket, Chaos in Your Life.” Substack, https://substack.com/home/post/p-147992139.
4. “The Jevons Paradox In Cloud Computing: A Thermodynamics Perspective.” arXiv, 2024. https://arxiv.org/abs/2411.11540.
5. “Why the AI World Is Suddenly Obsessed with Jevons Paradox.” NPR, 2025. https://www.npr.org/sections/planet-money/2025/02/04/g-s1-46018/ai-deepseek-economics-jevons-paradox.
6. Fix, Blair. “A Tour of the Jevons Paradox: How Energy Efficiency Backfires,” Economics from the Top Down. https://economicsfromthetopdown.com/2024/05/18/a-tour-of-the-jevons-paradox-how-energy-efficiency-backfires/#fig-coal