Kaldor-Hicks Efficiency
Version 1.0.0 · Updated 2026-07-28
CORE DEFINITION
Kaldor improvement (Kaldor efficiency), also known as Kaldor-Hicks efficiency, was proposed by John Hicks in 1939 to compare different public policies and economic states. If one person's situation improves due to a change, so that he can compensate another person's loss and still have surplus, then overall welfare has improved. It is a famous criterion in welfare economics.
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Kaldor improvement (Kaldor efficiency), also known as Kaldor-Hicks efficiency, was proposed by John Hicks in 1939 to compare different public policies and economic states. If one person's situation improves due to a change, so that he can compensate another person's loss and still have surplus, then overall welfare has improved. It is a famous criterion in welfare economics.
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Same as Kaldor-Hicks improvement: efficiency is measured by potential compensation; if the gains to winners are sufficient to compensate the losses of losers, overall efficiency improves. It is a common welfare standard in public policy.
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- zh.wikipedia.orghttps://zh.wikipedia.org/wiki/%E5%8D%A1%E5%B0%94%E5%A4%9A%E6%94%B9%E8%BF%9Bverified
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