The Kaldor-Hicks (KH) criterion has long been the standard for benefit-cost analysis, but it has also been widely criticized for ignoring equity and, arguably, moral sentiments in general. We suggest replacing KH with an aggregate measure called KHM, where the M stands for moral sentiments. KHM...

There are currently debates both about the ability to measure the value of moral sentiments and the nature of benefit-cost analysis. Moral sentiments can be reasonably measured in many situations and their consideration can improve benefit-cost analysis in any case. This argument is presented by...