Archives: Terms

Definition of Collective Choice Collective choice refers to decision-making processes and outcomes that are determined by groups rather than individuals. It encompasses the mechanisms, norms, and institutions through which collective decisions are made within societies, organizations, or any group of individuals. This concept is pivotal in fields such as economics, […]

Definition of Collateral Collateral refers to an asset or assets that a borrower offers to a lender as security for a loan. In the event that the borrower fails to repay the loan according to the agreed terms, the lender has the legal right to seize the collateral and sell […]

Definition of Cointegration Cointegration is a statistical property of a series of time-series variables which, when analyzed, indicate a long-term relationship or equilibrium amongst them, despite being non-stationary when taken individually. Non-stationary data series are those whose statistical properties such as mean, variance, and autocorrelation are not constant over time. […]

Definition of Coincidence of Wants The concept of the coincidence of wants, also known as the double coincidence of wants, is fundamental to the understanding of barter systems. It refers to a situation where two parties each hold an item the other desires, and they agree to a direct exchange […]

### Glossary of Economic Terms #### Deadweight Loss **Definition** Deadweight loss refers to a cost to society created by market inefficiency, primarily due to market distortions such as taxes, subsidies, tariffs, price floors, or ceilings that prevent the market from reaching equilibrium between supply and demand. It represents a loss […]

Definition of Coefficient of Variation The coefficient of variation (CV) is a statistical measure of the relative dispersion or variability of a data set in relation to its mean. It is expressed as a percentage and provides a standardized way of comparing the spread of data points across different scales […]

Definition of Coefficient of Determination The coefficient of determination, often symbolized as R2, is a statistic that measures the degree of variance for a dependent variable that’s predicted by an independent variable or variables in a regression model. Essentially, it represents how well the data fits the statistical model – […]

Definition of Cobweb Model A cobweb model is an economic theory used to explain why prices in certain markets can become volatile and the mechanisms that lead to cycles of boom and bust. This model is particularly relevant to markets for agricultural goods, where the response of supply and demand […]

Definition of Cobb-Douglas Production Function The Cobb-Douglas production function is a particular mathematical formula used in economics to describe the relationship between the quantities of two or more inputs (typically labor and capital) used in the production process and the quantity of output produced. The function is characterized by constant […]

Definition of Coalition A coalition refers to an alliance or a union between entities such as countries, organizations, or individuals, aimed at achieving a common goal or addressing a mutual concern. These entities choose to collaborate because they believe that joining forces increases their chances of success or influence in […]