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Revisiting the Normalization Axiom in Poverty Measurement

S. Subramanian ()
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S. Subramanian: Madras Institute of Development Studies

Finnish Economic Papers, 2009, vol. 22, issue 2, 89-98

Abstract: The ‘normalization’ axiom associated with Sen’s poverty index – and this, indeed, holds for most extant measures of poverty – entails an uncomfortable implication when we adopt a strong, or inclusive, definition of the poor. This paper suggests that we may not always be at liberty to adopt a weak definition. The available alternative then is to change the form of the poverty measure. Accordingly, a modification of his normalization axiom which leads to a variant of Sen’s index, together with a variant also of the Foster-Greer-Thorbecke poverty measures, is advanced and discussed. The derivation of the new normalization axiom benefits from Basu’s decomposition of the Sen axiom.

Date: 2009
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Handle: RePEc:fep:journl:v:22:y:2009:i:2:p:89-98