A new modified biased estimator for Zero inflated Poisson regression model.

ABSTRACT

Zero-inflated Poisson (ZIP) model is widely used for counting data with excessive zeroes. The multicollinearity is the common factor in the explanatory variables of the count data. In this context, typically, maximum likelihood estimation (MLE) generates unsatisfactory results due to inflation of mean square error (MSE). In the solution of this problem usually, ridge parameters are used. In this study, we proposed a new modified zero-inflated Poisson ridge regression model to reduce the problem of multicollinearity. We experimented within the context of a specified simulation strategy and recorded the behavior of proposed estimators. We also apply our proposed estimator to the real-life data set and explore how our proposed estimators perform well in the presence of multicollinearity with the help of ZIP model for count data.