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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- J. Shonkwiler & Nick Hanley, 2003. "A New Approach to Random Utility Modeling using the Dirichlet Multinomial Distribution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(3), pages 401-416, November.
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