Suppose there are two individuals. Level of good h can be determined only by individual 1 and it has a positive externality on individual 2. To find Pareto efficient allocation, we add the utilities of both individuals and then maximise. How do we find a Kaldor-Hicks efficient allocation? Or given an allocation how do we determine if it is Kaldor-Hicks efficient? Can we say that if the given allocation is not Pareto optimal then it is definitely not Kaldor-Hicks optimal?