erratim comments on How much does consumption affect production? - LessWrong

4 Post author: erratim 05 January 2015 03:51PM

You are viewing a comment permalink. View the original post to see all comments and the full post content.

Comments (60)

You are viewing a single comment's thread. Show more comments above.

Comment author: erratim 06 January 2015 02:43:55PM *  1 point [-]

Yes; another way to think of this is, "How do you model waste?"

  • If you think waste is best modeled by a fixed percentage of all production, then our best guess about the waste is that it changes proportionally with consumption. We don't get to magically assign our consumption to the 'waste' category without highly specific information (such as, "I found it in a dumpster").
  • If you expect the percentage of waste to grow/shrink with industry size, that could be an argument for slightly less/more than 1:1 effect (I'd put it in the "Gains to scale" category, even if it were negative). But I've never seen someone make that argument or attempt to model it.

Richard Chappell discusses a very simple model here.

Thanks for sending this; the 'chunky fallacy' comes up frequently when discussing this issue. Unfortunately, he explicitly endorses using short term elasticities at the end of his article.