Token Reduction Is Not Cost Reduction

A study of 2,848 analyzed Claude Code runs found that reducing tool-output tokens did not reliably lower billed cost. Prompt-cache traffic dominated cost composition at roughly 80% of the actual bill. One arm removing 38% of raw tool-output tokens saw 6.8% higher paired cost. Compression also harmed task completion, reducing patch application from 27/40 to 15/40 by corrupting edit anchors. The authors propose evaluating success-adjusted billed cost rather than token reduction alone.