How to translate Change in Duty Cycle?
Would the change in Duty Cycle of current translate into change in duty cycle of Voltage if a resistor is attached at the output of the sensor?


yes, of course


  Given such a case, what's the deciding factor for Sinking output vs Sourcing output?


If you have an output with a full driver (not for instance an open collector / sink only driver) you could attach the resistor to ground to get a voltage signal that is time-wise identical to your current signal (high when current is is sourced), or you could attach the resistor to Vcc to get the inverse (low when current is sunken). What to prefer is a matte of system design.

My guess is that you have an open-collector type sensor, in which case you will have to connect a resistor to Vcc, because the sensor can only sink current.

BTW, are you sure it is the duty cycle you are interested in? Wheel speed sensors are often of the magnet/hall-sensor or LED/fototodiode type, which produce pulses at a frequency proportional to the speed. The duty cycle may change too, but is in most cases not what you should be measuring.