Loss function

In statistics, decision theory and economics, a loss function is a function that maps an event (technically an element of a sample space) onto a real number representing the economic cost of the event.

Loss functions are typically expressed in monetary terms though other measures of cost are possible, for example mortality or morbidity in the field of public health.

Loss functions are complementary to utility functions which represent benefit and satisfaction. Typically, for utility U, loss is equal to k-U, where k is some arbitrary constant.