The infinite multiplication factor can fully represent only a reactor that is infinitely large, because it assumes that no neutrons leak out of the reactor. To completely describe the neutron life cycle in a real, finite reactor, it is necessary to account for neutrons that leak out. The multiplication factor that takes leakage into account is the effective multiplication factor (k_eff ), which is defined as the ratio of the neutrons produced by fission in one generation to the number of neutrons lost through absorption and leakage in the preceding generation.

The effective multiplication factor may be expressed mathematically as shown below.

So, the value of k_eff for a self-sustaining chain reaction of fissions, where the neutron population is neither increasing nor decreasing, is one. The condition where the neutron chain reaction is self-sustaining and the neutron population is neither increasing nor decreasing is referred to as the critical condition and can be expressed by the simple equation .

If the neutron production is greater than the absorption and leakage, the reactor is called supercritical. In a supercritical reactor, k_eff is greater than one, and the neutron flux increases each generation. If, on the other hand, the neutron production is less than the absorption and leakage, the reactor is called subcritical. In a subcritical reactor, k_eff is less than one, and the flux decreases each generation.

When the multiplication factor of a reactor is not equal to exactly one, the neutron flux will change and cause a change in the power level. Therefore, it is essential to know more about how this factor depends upon the contents and construction of the reactor. The balance between production of neutrons and their absorption in the core and leakage out of the core determines the value of the multiplication factor. If the leakage is small enough to be neglected, the multiplication factor depends upon only the balance between production and absorption, and is called the infinite multiplication factor () since an infinitely large core can have no leakage. When the leakage is included, the factor is called the effective multiplication factor (k_eff).

The effective multiplication factor (k_eff) for a finite reactor may be expressed mathematically in terms of the infinite multiplication factor and two additional factors which account for neutron leakage as shown below.