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| Definition: |
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Pareto efficiency, also referred to as allocative efficiency, occurs when resources are so allocated that it is not possible to make anyone better off without making someone else worse off.
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| Context: |
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When referring to a situation as Pareto efficient, it is usually assumed that products are being produced in the most efficient (least-cost) way. Pareto optimality is sometimes used interchangeably with Pareto efficiency. Sometimes Pareto optimality is reserved for cases when both production and allocative efficiency are obtained.
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| Source
Publication: |
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Glossary of Industrial Organisation Economics and Competition Law, compiled by R. S. Khemani and D. M. Shapiro, commissioned by the Directorate for Financial, Fiscal and Enterprise Affairs, OECD, 1993.
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| Statistical
Theme: Financial statistics |
| Created
on Thursday, January 3, 2002 |
| Last
updated on Monday, March 10, 2003 |
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