# [R-sig-ME] Observation-level random effect to model overdispersion

John Maindonald john.maindonald at anu.edu.au
Mon Mar 21 23:23:07 CET 2011

```One point, additional to other responses.  There is just one
"miniature variance component" (by the way, not miniature
in the sense that it has to be small).  As I understand it, a
normal distribution with this variance generates one random
effect, on the scale of the linear predictor, for each observation.
On the scale of the response, well . . .

John Maindonald             email: john.maindonald at anu.edu.au
phone : +61 2 (6125)3473    fax  : +61 2(6125)5549
Centre for Mathematics & Its Applications, Room 1194,
John Dedman Mathematical Sciences Building (Building 27)
Australian National University, Canberra ACT 0200.
http://www.maths.anu.edu.au/~johnm
John Maindonald             email: john.maindonald at anu.edu.au
phone : +61 2 (6125)3473    fax  : +61 2(6125)5549
Centre for Mathematics & Its Applications, Room 1194,
John Dedman Mathematical Sciences Building (Building 27)
Australian National University, Canberra ACT 0200.
http://www.maths.anu.edu.au/~johnm

On 21/03/2011, at 10:51 PM, M.S.Muller wrote:

> Dear all,
>
> I'm trying to analyze some strongly overdispersed Poisson-distributed data using R's mixed effects model function "lmer". Recently, several people have suggested incorporating an observation-level random effect, which would model the excess variation and solve the problem of underestimated standard errors that arises with overdispersed data. It seems to be working, but I feel uneasy using this method because I don't actually understand conceptually what it is doing. Does it package up the extra, non-Poisson variation into a miniature variance component for each data point? But then I don't understand how one ends up with non-zero residuals and why one can't just do this for any analyses (even with normally-distributed data) in which one would like to reduce noise.
>
> I may be way off base here, but does this approach model some kind of mixture distribution that's a combination of Poisson and whatever distribution the extra variation is? I've read that people often use a negative binomial distribution (aka Poisson-gamma) to model overdispersed count data in which they assume that the process is Poisson (so they use a log link) but the extra variation is a gamma distribution (in which variance is proportional to square of the mean). The frequently referred to paper by Elston et al (2001) describes modeling a Poisson-lognormal distribution in which overdispersion arises from errors taking on a lognormal distribution. Is the approach of using the observation-level random effect doing something similar, and simply assuming some kind of Poisson-normal mixed distribution? Does this approach therefore assume that the observation-level variance is normally distributed?
>
> If anyone could give me any guidance on this, I would appreciate it very much.
>
> Martina Muller
>
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