Kaldor-Hicks Criterion

 

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Kaldor-Hicks Criterion

The criterion that, for a change in policy or policy regime to be viewed as beneficial, the gainers should be able to compensate the losers and still be better off. The criterion does not require that the compensation actually be paid, which, if it did, would make this the same as the Pareto criterion. Due to Kaldor (1939), Hicks (1940).



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