Definition of Deadweight Loss

Definition: Deadweight loss measures the inefficiency caused from a market distortion, such as a tax levied on an item or a minimum price law. The deadweight loss is measured by the sum total of both the consumer surplus and producer surplus caused by the policy.

Terms related to Deadweight Loss:

• The Loss Fuction
• The Criterion Function
• WLOG

About.Com Resources on Deadweight Loss:

• Why Study Economics?
• A Green Stimulus Plan to Improve the Environment and the Economy
• Tax Simplification, Compliance Costs and Deadweight Loss

Writing a Term Paper? Here are a few starting points for research on Deadweight Loss:

Journal Articles on Deadweight Loss:

• Exact Consumer's Surplus and Deadweight Loss
• Tax Avoidance and the Deadweight Loss of the Income Tax
• The Deadweight Loss of Christmas