Hicks–Kaldor compensation criterion
E204382
The Hicks–Kaldor compensation criterion is an economic efficiency test stating that a policy change is desirable if those who gain could in principle compensate those who lose and still be better off, regardless of whether compensation actually occurs.
All labels observed (7)
Statements (43)
| Predicate | Object |
|---|---|
| instanceOf |
economic efficiency criterion
ⓘ
welfare economics concept ⓘ |
| aimsAt | efficiency evaluation without explicit value judgments on equity ⓘ |
| alsoKnownAs |
Hicks–Kaldor compensation criterion
ⓘ
surface form:
Kaldor–Hicks efficiency criterion
|
| appliesTo | policy changes with winners and losers ⓘ |
| assumes |
individual preferences are given
ⓘ
interpersonal utility comparisons are not required ⓘ monetary measures of gains and losses ⓘ |
| category | economic theorems and concepts ⓘ |
| compares | alternative social states ⓘ |
| contrastsWith | actual Pareto improvement ⓘ |
| coreIdea | a policy change is desirable if gainers could in principle compensate losers and still be better off ⓘ |
| criticizedFor |
ignoring distributional consequences
ⓘ
not ensuring losers are actually compensated ⓘ path dependence of evaluations ⓘ possibility of inconsistent social rankings ⓘ |
| defines |
Hicks–Kaldor compensation criterion
self-linksurface differs
ⓘ
surface form:
Kaldor–Hicks efficiency
|
| doesNotRequire | actual compensation ⓘ |
| field |
cost–benefit analysis
ⓘ
microeconomics ⓘ welfare economics ⓘ |
| generalizes | Pareto improvement concept ⓘ |
| hasLimitation |
depends on initial income distribution
ⓘ
sensitive to choice of numeraire ⓘ |
| influenced | modern cost–benefit analysis standards ⓘ |
| influencedBy |
welfare economics
ⓘ
surface form:
Paretian welfare economics
|
| involves | potential Pareto improvement ⓘ |
| language | English term ⓘ |
| measurementBasis |
willingness to accept
ⓘ
willingness to pay ⓘ |
| namedAfter |
John R. Hicks
ⓘ
surface form:
John Hicks
Nicholas Kaldor ⓘ |
| originPeriod | 1930s ⓘ |
| relatedTo |
Pareto efficiency
ⓘ
Hicks–Kaldor compensation criterion self-linksurface differs ⓘ
surface form:
Scitovsky paradox
|
| requires |
aggregate gains exceed aggregate losses in monetary terms
ⓘ
potential compensation only ⓘ |
| usedIn |
cost–benefit analysis of public projects
ⓘ
law and economics ⓘ policy evaluation ⓘ |
| usedToJustify | policies with net monetary benefits ⓘ |
| uses | hypothetical compensation test ⓘ |
| weakerThan |
Pareto efficiency
ⓘ
surface form:
Pareto criterion
|
How these facts were elicited
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Instruction
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Input
Subject: Hicks–Kaldor compensation criterion Description of subject: The Hicks–Kaldor compensation criterion is an economic efficiency test stating that a policy change is desirable if those who gain could in principle compensate those who lose and still be better off, regardless of whether compensation actually occurs.
Referenced by (11)
Full triples — surface form annotated when it differs from this entity's canonical label.
this entity surface form:
Kaldor-Hicks efficiency
this entity surface form:
Kaldor–Hicks efficiency
this entity surface form:
Kaldor–Hicks efficiency
this entity surface form:
Kaldor–Hicks efficiency criterion
Hicks–Kaldor compensation criterion
→
defines
→
Hicks–Kaldor compensation criterion
self-linksurface differs
ⓘ
this entity surface form:
Kaldor–Hicks efficiency
Hicks–Kaldor compensation criterion
→
relatedTo
→
Hicks–Kaldor compensation criterion
self-linksurface differs
ⓘ
this entity surface form:
Scitovsky paradox
subject surface form:
Nicholas Kaldor
this entity surface form:
Kaldor–Hicks efficiency
subject surface form:
Nicholas Kaldor
this entity surface form:
Kaldor–Hicks efficiency concept
subject surface form:
Nicholas Kaldor
this entity surface form:
Kaldor–Hicks compensation principle
this entity surface form:
Kaldor–Hicks efficiency