In this paper we provide a Random-Utility based derivation of the Dirichlet-Multinomial regression and posit it as a convenient alternative for dealing with overdispersed multinomial data. We show that this model is a natural extension of McFadden's conditional logit for grouped data and show how it relates with count models. Finally, we use a data set on patient choice of hospitals to illustrate an application of the Dirichlet-Multinomial regression.
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