Kaldor-Hicks efficiency

Kaldor-Hicks efficiency is an economic concept used to evaluate changes in resource allocation. It suggests a change is efficient if the gains to those who benefit outweigh the losses to those who are disadvantaged. This is measured by whether the gainers could, in principle, compensate the losers and still be better off, even if direct compensation doesn't occur. This criterion focuses on maximizing the overall value of resource allocation by assessing if the net benefit increases. It's a more practical measure than Pareto optimality, which requires no one to be worse off for a change to be considered efficient.123