A New Index of Poverty : An Improvement in Thon Index

Sen (1976) broke new grounds in the area of measurement of poverty. He proposed two test axioms of monotoncity and transfer for examining poverty measures. However, Sen’s own index does not pass this transfer axiom. Thon (1919) proposed an index that satisfies the transfer axiom. But Thon's index does not pass some of the normalisation axioms proposed by Sen (1916) or Takayama (1979). In this paper I propose to develop an index which satisfies the transfer axiom as well as a set of normalisation axioms including those proposed by Sen and Takayama.