This paper examines the measurement of social welfare, poverty and inequality taking into account reference …-dependence, loss aversion and diminishing sensitivity - aspects emphasized in Prospect Theory - to social welfare measurement. We … differences between standard poverty and inequality measures based on observed income and measures that are calculated based on …

Poverty-reducing policies ought to prioritize the "deserving" poor, that is, those who do all that can be reasonably … a theory of justice accommodating norms of individual responsibility. I propose and axiomatically characterize a family … of poverty indices that address these issues. Formally, poverty is measured by the sum of specific indices of individual …