The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Social Cost

  • J. de V. Graaff
Reference work entry


The idea underlying the notion of social cost is a very simple one. A man initiating an action does not necessarily bear all the costs (or reap all the benefits) himself. Those that he does bear are private costs; those he does not are external costs. The sum of the two constitutes the social cost.

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • J. de V. Graaff
    • 1
  1. 1.