A LATENT CLASS POISSON REGRESSION-MODEL FOR HETEROGENEOUS COUNT DATA

In this paper an approach is developed that accommodates heterogeneity in Poisson regression models for count data. The model developed assu mes that heterogeneity arises from a distribution of both the intercep t and the coefficients of the explanatory variables. We assume that th e mixing distribution is discrete, resulting in a finite mixture model formulation. An EM algorithm for estimation is described, and the alg orithm is applied to data on customer purchases of books offered throu gh direct mail. Our model is compared empirically to a number of other approaches that deal with heterogeneity in Poisson regression models.