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Pareto Improvement

Definition

Pareto efficiency or Pareto optimality is a state of allocation of resources from which it is impossible to reallocate so as to make any one individual or preference criterion better off without making at least one individual or preference criterion worse off. The concept is named after Vilfredo Pareto, Italian engineer and economist, who used the concept in his studies of economic efficiency and income distribution. The concept has been applied in academic fields such as economics, engineering, and the life sciences.

What is a 'Pareto Improvement'

A pareto improvement is a neoclassical economics, an action done in an economy that harms no one and helps at least one person. The theory suggests that Pareto improvements will keep adding to the economy until it achieves a Pareto equilibrium, where no more Pareto improvements can be made.

Explaining 'Pareto Improvement'

In real-world economics, the Pareto improvement is often replaced by the Kaldor-Hicks improvement, of which Pareto improvements are a subset. A Kaldor-Hicks improvement is associated with cost-benefit improvements and is related in terms of actual dollars.


Further Reading


Pareto-improving social security reform when financial markets are incomplete!?
www.aeaweb.org [PDF]
This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly …

Intergenerational risk-sharing via social security when financial markets are incompleteIntergenerational risk-sharing via social security when financial markets are incomplete
pubs.aeaweb.org [PDF]
This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly …

Pareto-improving campaign finance policyPareto-improving campaign finance policy
www.aeaweb.org [PDF]
This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly …

Pareto-optimality of authentic informationPareto-optimality of authentic information
www.jstor.org [PDF]
This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly …

Sensible Policy Tool for Pareto Improvement: Capital Controls, ASensible Policy Tool for Pareto Improvement: Capital Controls, A
heinonline.org [PDF]
This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly …

Analysis of Conditions of Institution Pension System's Pareto Improvement <span style=[J]' src='/thumbnails/?img=http%3A%2F%2Fen.cnki.com.cn%2FArticle_en%2FCJFDTotal-GGGL201101003.htm' />Analysis of Conditions of Institution Pension System's Pareto Improvement [J]
en.cnki.com.cn [[J]' href='https:/api.miniature.io/pdf?url=en.cnki.com.cn%2FArticle_en%2FCJFDTotal-GGGL201101003.htm'>PDF]
This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly …

Pareto improvement and joint cash management optimisation for banks and cash-in-transit firmsPareto improvement and joint cash management optimisation for banks and cash-in-transit firms
www.sciencedirect.com [PDF]
This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly …

Pareto improvement and agenda control of sequential financial innovationsPareto improvement and agenda control of sequential financial innovations
www.sciencedirect.com [PDF]
This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly …

Pension reform, financial market development, and economic growth: preliminary evidence from ChilePension reform, financial market development, and economic growth: preliminary evidence from Chile
link.springer.com [PDF]
This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly …

Pareto improving financial innovation in incomplete marketsPareto improving financial innovation in incomplete markets
link.springer.com [PDF]
This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly …



Q&A About Pareto Improvement


What is a Pareto improvement?

A Pareto improvement is a neoclassical economics, an action done in an economy that harms no one and helps at least one person. The theory suggests that Pareto improvements will keep adding to the economy until it achieves a Pareto equilibrium, where no more Pareto improvements can be made.

What is Kaldor-Hicks improvement?

Kaldor-Hicks improvement is associated with cost-benefit improvements and is related in terms of actual dollars.

How does the theory suggest that Pareto improvements will continue to add to the economy?

The theory suggests that paretos will keep adding to the economy until it achieves a paretos equilibrium, where no more paretos can be made.