Bayesian analysis of zero-inflated regression models

In modeling defect counts collected from an established manufacturing processes, there are usually a relatively large number of zeros (non-defects). The commonly used models such as Poisson or Geometric distributions can underestimate the zero-defect probability and hence make it difficult to identify significant covariate effects to improve production quality. This article introduces a flexible class of zero inflated models which includes other familiar models such as the Zero Inflated Poisson (ZIP) models, as special cases. A Bayesian estimation method is developed as an alternative to traditionally used maximum likelihood based methods to analyze such data. Simulation studies show that the proposed method has better finite sample performance than the classical method with tighter interval estimates and better coverage probabilities. A real-life data set is analyzed to illustrate the practicability of the proposed method easily implemented using WinBUGS. (c) 2004 Elsevier B.V. All rights reserved.