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Poverty, Income Inequality, and Their Measures: Professor Sen's Axiomatic Approach Reconsidered

Noriyuki Takayama

Abstract

This paper proposes the Gini coefficient of the censored income distribution truncated from above by the poverty line as an index of poverty. An ordinalist axiomatic approach, which was introduced by Professor Sen, is used to justify this measure. In comparison with Sen's index, our alternative measure is simplerand more concerned with relative deprivation; it can be regarded as a more natural translation of the Gini coefficient from the measurement of inequality into that of poverty.