A hospital bed built is a bed filled, regardless of need.
Roemer's 1961 finding, and one of the foundations of health economics. It is supply-induced demand in its clearest form, and the reason bed capacity is regulated rather than left to providers.
In practice
- A region that opens 200 additional beds fills them within the year, and it is the admission threshold that moved rather than the population.
- A firm that adds a second meeting room finds both booked solid within a month, and nobody was previously unable to meet.
- Further reading
- Wikipedia
- Subject
- Economics & Incentives
- Essay
- The regularities money obeys