Efficiency increase oftentimes reduces product or service costs, which can in turn ramp up consumption (due to reduced prices), thus partly canceling out the original savings. This is known as the rebound effect.
This tendency is sometimes known as the “rebound effect”. For example, if householders install improved insulation or a more efficient heating boiler, they should in principle reduce their heating bills.
Three policy strategies to mitigate the rebound effect can be distinguished: (1) economy-wide increases in environmental efficiency, (2) shifts to greener consumption patterns and (3) downsizing consumption (Girod et al., 2014).
Rebound Effect means. - environmental benefit (saving of resources) is less than expected benefit. - behavioral or systemic responses to new technologies offset benefits from technology.
A rebound effect is what happens when the body tries to bring itself back into balance (a condition known as homeostasis) after a drug has been taken, by creating physical symptoms that are the opposite to those caused by the drug.
Direct rebound effect: An increase in consumption of a good is caused by the lower cost of use. This is caused by the substitution effect. Indirect rebound effect: The lower cost of a service enables increased household consumption of other goods and services.
The so-called rebound effect occurs when some of the savings from energy efficiency are cancelled out by changes in people's behaviour. On a consumer level it can be direct (turning up the heating in a newly insulated house) or indirect (spending the money saved on bills on a flight to Spain).
The rebound effect is a type of withdrawal often associated with medications such as sleep aids, corticosteroids, antidepressants, and antipsychotics. During rebound, the symptoms treated by the medication reemerge, often in greater intensity than before the person began medicated treatment.