<p>The terms &quot;Pareto optimal&quot; and &quot;Pareto efficient&quot; mean the same thing.</p>
<p>However, <a href="https://www.emerald.com/insight/content/doi/10.1108/S0743-415420140000032005/full/html" rel="noreferrer">this paper</a> suggests that
the term &quot;Pareto optimal&quot; carries a normative connotation, and that economists have shifted towards using the term &quot;Pareto efficient&quot;. But that's just an analysis of the use of language, there is no difference in the definition of the two terms.</p>

CC BY-SA 4.0
2024-06-30T04:22:23.780Z
2024-07-01T02:49:21.480Z
2024-07-01T02:49:21.480Z
C.M.O.B.
<p>I totally disagree! There's a difference and it can be seen when policymakers make decisions that are skewed versus decisions that satisfy the general public. I take Optimality to denote policy that favour those who control resources in the economy and efficiency to be indiscriminate. Two tail 5percent or even 20percent would reflect optimatity as would a regressive tax system versus 95percent within the middle of normal distribution for efficiency, as in progressive tax system.
In teaching Problems and Policies in Economic Development, I find such analysis to be useful. The example of building a highway linking all Nigerian State capitals versus linking same with modern highways to localities of local government's confirm Pareto optimality versus efficiency!
The same holds for Urban Banking versus spreading same services to rural areas --this, especially in an economy such as Nigeria's, whose population is almost 50-50 Urban-Rural. This, in my understanding of economic modeling, theory versus positivism that puts autistic economics to rest is reason why 90percent problems afflicting the Nigerian economy, (especially ability of Central Bank to have control of currency circulating) is tied to the inefficaciousness of it's banking system, which is badly skewed towards optimality (Urban rich) versus efficiency (Rural masses who resort to hording for lack of financial institutions)!!!
I often start teaching any course in economics by reflecting on Robert Flower's 1994 and 1995 essays: Economics is an Inductive Science; and Axiomatics in Economics, respectively!
I often stretch my analysis to embrace the Paris 2000 and Harvard 2001 demonstrations against economic theory, supported by Victor Arguero's Autistic Economics and justify these with positive economics, post-autistic economics, post-positivism, justifying why why economic theory must locality and environmentally Ecological to be clinical! Economic theory will only make sense if it goes ecological, reflecting domestic realities of individual economies and not generic as theories and models may wish!
In the Nexus of Pareto Efficiency versus Optimality, abundant literature exist to justify my prognostics. I owe us a formal essay in this domain. But remember when Robert Closer (my lecturer at USC, Columbia, SC, USA at Darla Moore School of business) charged that all what we teach as micro- and macro-economics was if not rubbish, close to rubbish and that we who teach aught be ashamed of ourselves? We Al went quiet but for one lecturer who rebuked the idea of axiomatic and got a response from Closer that painted a worse picture of our claims of economics being a &quot;science&quot;!
When we can't agree that there's a difference between Pareto Optimality and Pareto Efficiency, we are testifying to the depth of economics suffering from autism!
Justice M. Mbuh (PhD, Econ; PhD, International Relations)
Department of Economics,
Nasarawa State University, Keffi (NSUK),
Keffi, Nasarawa State, Nigeria.
justicemulummbuh@nsuk.edu.ng;
muluhtennu@gmail.com.
+234-7011604296.</p>

CC BY-SA 4.0
2024-12-31T05:13:09.587Z
2024-12-31T05:13:09.587Z
Justice M. Mbuh
<p>Pareto Optimal and Pareto Efficient seem similar but I don't understand the difference. What is the difference between these two concepts?</p>

<microeconomics><definition><pareto-efficiency>
Pareto Optimal vs Pareto Efficient
Jkilla420
# Pareto Optimal vs Pareto Efficient

(Asked by: username_0 on 2024-06-30)

Pareto Optimal and Pareto Efficient seem similar but I don't understand the difference. What is the difference between these two concepts?

**Tags:** microeconomics, definition, pareto-efficiency

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## 2 answers

### Answer by username_1 on 2024-06-30. Score: 8

The terms "Pareto optimal" and "Pareto efficient" mean the same thing.

However, [this paper](https://www.emerald.com/insight/content/doi/10.1108/S0743-415420140000032005/full/html) suggests that
the term "Pareto optimal" carries a normative connotation, and that economists have shifted towards using the term "Pareto efficient". But that's just an analysis of the use of language, there is no difference in the definition of the two terms.


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### Answer by username_2 on 2024-12-31. Score: -2

I totally disagree! There's a difference and it can be seen when policymakers make decisions that are skewed versus decisions that satisfy the general public. I take Optimality to denote policy that favour those who control resources in the economy and efficiency to be indiscriminate. Two tail 5percent or even 20percent would reflect optimatity as would a regressive tax system versus 95percent within the middle of normal distribution for efficiency, as in progressive tax system.
In teaching Problems and Policies in Economic Development, I find such analysis to be useful. The example of building a highway linking all Nigerian State capitals versus linking same with modern highways to localities of local government's confirm Pareto optimality versus efficiency!
The same holds for Urban Banking versus spreading same services to rural areas --this, especially in an economy such as Nigeria's, whose population is almost 50-50 Urban-Rural. This, in my understanding of economic modeling, theory versus positivism that puts autistic economics to rest is reason why 90percent problems afflicting the Nigerian economy, (especially ability of Central Bank to have control of currency circulating) is tied to the inefficaciousness of it's banking system, which is badly skewed towards optimality (Urban rich) versus efficiency (Rural masses who resort to hording for lack of financial institutions)!!!
I often start teaching any course in economics by reflecting on Robert Flower's 1994 and 1995 essays: Economics is an Inductive Science; and Axiomatics in Economics, respectively!
I often stretch my analysis to embrace the Paris 2000 and Harvard 2001 demonstrations against economic theory, supported by Victor Arguero's Autistic Economics and justify these with positive economics, post-autistic economics, post-positivism, justifying why why economic theory must locality and environmentally Ecological to be clinical! Economic theory will only make sense if it goes ecological, reflecting domestic realities of individual economies and not generic as theories and models may wish!
In the Nexus of Pareto Efficiency versus Optimality, abundant literature exist to justify my prognostics. I owe us a formal essay in this domain. But remember when Robert Closer (my lecturer at USC, Columbia, SC, USA at Darla Moore School of business) charged that all what we teach as micro- and macro-economics was if not rubbish, close to rubbish and that we who teach aught be ashamed of ourselves? We Al went quiet but for one lecturer who rebuked the idea of axiomatic and got a response from Closer that painted a worse picture of our claims of economics being a "science"!
When we can't agree that there's a difference between Pareto Optimality and Pareto Efficiency, we are testifying to the depth of economics suffering from autism!
Justice M. Mbuh (PhD, Econ; PhD, International Relations)
Department of Economics,
Nasarawa State University, Keffi (NSUK),
Keffi, Nasarawa State, Nigeria.
justicemulummbuh@nsuk.edu.ng;
muluhtennu@gmail.com.
+234-7011604296.


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