deadweight loss

USAGE SUMMARY

The phrase "deadweight loss" is correct and usable in written English. You can use it in discussions about economics, particularly when referring to inefficiencies in markets. For example, "The imposition of a tax can create a deadweight loss in the economy." Alternative expressions include "economic inefficiency" and "welfare loss."

✓ Grammatically correct

News & Media

Science

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

57 human-written examples

So celebrate your deadweight loss this year.

The Economist

Update:  Tyler Cowen points out that gift cards may have less deadweight loss, because so many people lose themImagine that, the "showing-that-you-care" benefits of gift-giving, but without the deadweight loss.

The Economist

There are many oft-discussed reasons for this; the most commonly aired involve the deadweight loss from taxation.

The Economist

(Project Syndicate, via Mark Thoma Joel Waldfogell continues to remind us of the deadweight loss of Christmas.

The Economist

In Durham, offering universal free school meals in primary schools cost £16.6m a year – but £7.6m, nearly half the total amount, counted as deadweight loss.

The Guardian

A deadweight loss is created when you spend eighty dollars to give me a sweater that I would spend only sixty-five dollars to buy myself.

The New Yorker

Sunhat, bikini, flak jacket Paradise well and truly lost An anthropology of happiness A matter of choice Crisp and even Is Santa a deadweight loss?

The Economist

The deadweight loss of financing these transfers is one to two-thirds as large as U.S. gains from trade with China.

The New York Times

We get a lot of straight-up destruction of wealth and welfare from deadweight loss, negative-sum transfers, and stupid wars.

The Economist

Human-verified similar examples from authoritative sources

Similar Expressions

2 human-written examples

For this last group the time invested in the process is likely to be a deadweight loss other than some process utility from writing the grant and from participating in peer review.

British Medical Journal

Calculating the deadweight loss of a real market such as Iran wholesale electricity market.

Journal of Industrial Engineering International

Expert writing Tips

Best practice

When discussing the impact of taxes or subsidies, clearly illustrate how they lead to a "deadweight loss" by distorting market prices and quantities.

Common error

Avoid attributing "deadweight loss" solely to the existence of taxes or regulations; instead, focus on how these interventions distort market signals and lead to inefficient resource allocation.

Linguistic Context

The phrase "deadweight loss" functions as a noun phrase in economics, referring to a reduction in economic efficiency when the equilibrium for a good or service is not Pareto optimal. Ludwig indicates that it is appropriate in discussions of economics.

Expression frequency: Common

Frequent in

Science

40%

News & Media

30%

Formal & Business

30%

Less common in

Wiki

0%

Reference

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Social Media

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Ludwig's WRAP-UP

In summary, "deadweight loss" is a crucial concept in economics that describes the loss of economic efficiency when the equilibrium for a good or service is not Pareto optimal. It's a noun phrase primarily used in formal and scientific contexts, like academic research and policy analysis. Ludwig indicates that its usage is grammatically correct and well-established. The concept appears frequently in contexts such as science, news and media, and formal business settings. When writing about "deadweight loss", ensure to illustrate how market distortions (like taxes or subsidies) cause this loss, and avoid attributing it solely to the existence of interventions without explaining the underlying mechanism. Alternative phrases include "economic inefficiency" and "welfare loss".

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

economic inefficiency

Refers to a broader concept of resources not being allocated optimally, encompassing more than just lost surplus.

welfare loss

Focuses on the reduction in overall societal well-being due to market distortions or inefficiencies.

efficiency loss

Highlights the loss of potential output or benefits due to suboptimal resource allocation.

lost surplus

Specifically refers to the reduction in consumer and producer surplus due to a market inefficiency.

allocative inefficiency

Indicates that resources are not being used in a way that maximizes societal benefit.

market failure

A broader term referring to situations where the market does not allocate resources efficiently.

economic waste

Emphasizes the squandering or misuse of resources, leading to a reduction in overall economic value.

inefficient allocation

Highlights the suboptimal distribution of resources, resulting in lower overall output or value.

resource misallocation

Focuses on the incorrect or inappropriate distribution of resources, leading to reduced efficiency.

social cost

Encompasses the total cost to society, including both private and external costs, often associated with inefficiencies.

FAQs

How can I illustrate the concept of "deadweight loss" in economics?

You can demonstrate "deadweight loss" by showing how taxes, subsidies, or price controls distort market equilibrium, leading to a reduction in total surplus (consumer plus producer surplus).

What are some real-world examples of "deadweight loss"?

Examples include the inefficiencies created by monopolies, tariffs, and taxes that discourage production or consumption. You might also consider the "economic waste" generated by inefficient government programs.

What is the difference between "deadweight loss" and "economic inefficiency"?

"Deadweight loss" is a specific type of "economic inefficiency" that refers to the loss of economic surplus due to market distortions, while "economic inefficiency" is a broader term encompassing any situation where resources are not allocated optimally.

How does the elasticity of demand and supply affect "deadweight loss"?

The more elastic the demand and supply curves are, the greater the "deadweight loss" from a tax or other market distortion, because consumers and producers are more responsive to price changes, leading to larger reductions in quantity exchanged.