A Head‐count Measure of Rank Mobility and its Directional Decomposition

Abstract

We propose and characterize a new measure of rank mobility. The index is given by the head count of those whose positions change in the move from one period to the next divided by population size. The interpretation of this head‐count ratio is straightforward and intuitive. In addition, we illustrate how the measure can be decomposed into an index of upwards mobility and an index of downwards mobility. The axioms used in our characterization results are appealing and easy to justify. We conclude with an application to the Human Development Index, a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and having a decent standard of living.