Attenuation of relative poverty by taxes and subsidies

摘要

The paper is the first systematic investigation into income redistribution functions that reduce relative poverty as measured by indices and orderings. A general class of poverty indices is introduced which includes the indices due to Sen, Thon, Kakwani, Chakravarty, FGT and many others. The functional form of a tax and/or subsidies function is derived which decreases the indices in this class. The same is done for poverty orderings. Further, the attenuation of poverty indices is investigated when the poverty line is a percentage of a quantile. Finally, some of the results are extended to the measurement of multivariate poverty.