Statistical Modelling 20 (2) (2020), 127–147

Modelling counts with state-dependent zero inflation

Tobias A MÖller,
Department of Mathematics and Statistics,
Helmut Schmidt University,
Hamburg,
Germany.


Christian H Weiß,
Department of Mathematics and Statistics,
Helmut Schmidt University,
Hamburg,
Germany.
e-mail: weissc@hsu-hh.de

Hee-Young Kim,
Division of Economics and Statistics, National Statistics,
Korea University,
Sejong,
South Korea.


Abstract:

We introduce a state-dependent zero-inflation mechanism for count distributions with unbounded or bounded support. Instead of uniformly downweighting the parent distribution, this flexible approach allows us to generate most of the zeros from either low or high counts. We derive the stochastic properties of the inflated distributions and discuss special instances designed for zero inflation caused by, for example, excessive demand or underreporting. Furthermore, we apply the state-dependent zero-inflation mechanism to generalize existing models for count time series with bounded support.

Keywords:

Count data; count time series; state dependence; underreporting; zero inflation.

Downloads:

Example data and code in zipped archive.
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