This work treats the construction of a mobility index able to grasp the prevailing direction in the dynamics ruled by a given transition matrix. The states of the matrix are based on an ordered economic variable, such as firm size, income or ratings, for which the future state can be better or worse than the current one. We propose here a whole family of directional indices, evaluated as a function of the transition matrix, and defined so that their absolute value measures the intensity of mobility, and their sign (+/-) represents the prevailing direction towards improvement/worsening in the dynamics under study.
Ferretti, C., Ganugi, P., A new mobility index for Trandition Matrices, <<Quaderni del Dipartimento di Scienze Economiche e Sociali>>, 2012; (Settembre): 1-18 [http://hdl.handle.net/10807/43104]
A new mobility index for Trandition Matrices
Ferretti, Camilla;Ganugi, Piero
2012
Abstract
This work treats the construction of a mobility index able to grasp the prevailing direction in the dynamics ruled by a given transition matrix. The states of the matrix are based on an ordered economic variable, such as firm size, income or ratings, for which the future state can be better or worse than the current one. We propose here a whole family of directional indices, evaluated as a function of the transition matrix, and defined so that their absolute value measures the intensity of mobility, and their sign (+/-) represents the prevailing direction towards improvement/worsening in the dynamics under study.
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