Kaldor-Hicks Efficiency
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A Kaldor-Hicks Efficiency is an economic efficiency measure that captures some of the intuitive appeal of Pareto efficiency, but has less stringent criteria and is hence applicable to more circumstances.
- AKA: Kaldor–Hicks Efficiency.
- See: Nicholas Kaldor, John Hicks, Economic Efficiency, Pareto Efficiency.
References
2014
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Kaldor–Hicks_efficiency Retrieved:2014-7-27.
- Kaldor–Hicks efficiency, named for Nicholas Kaldor and John Hicks, also known as Kaldor–Hicks criterion, is a measure of economic efficiency that captures some of the intuitive appeal of Pareto efficiency, but has less stringent criteria and is hence applicable to more circumstances. Under Kaldor–Hicks efficiency, an outcome is more efficient if those that are made better off could in theory compensate those that are made worse off and lead to a Pareto optimal outcome. The compensation does not actually have to occur (there's no presumption in favor of status-quo) and thus, a more efficient outcome can in fact leave some people worse off.