What is dihedral effect and how does it contribute to lateral stability?

Dihedral effect refers to the tendency of an aircraft to roll level when in a sideslip. It is primarily created by wing dihedral (wings angled upward from root to tip) but also influenced by wing sweep and vertical tail position. When sideslipping, the lower wing has a higher effective angle of attack, generating more lift and rolling the aircraft back to level. Positive dihedral effect (roll opposing sideslip) provides lateral stability. Excessive dihedral can lead to poor Dutch roll characteristics, so designers balance dihedral angle with other factors.