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Mixed hidden Markov models for longitudinal data: an overview

Mixed hidden Markov models for longitudinal data: an overview
Mixed hidden Markov models for longitudinal data: an overview
In this paper we review statistical methods which combine hidden Markov models (HMMs) and random effects models in a longitudinal setting, leading to the class of so-called mixed HMMs. This class of models has several interesting features. It deals with the dependence of a response variable on covariates, serial dependence, and unobserved heterogeneity in an HMM framework. It exploits the properties of HMMs, such as the relatively simple dependence structure and the efficient computational procedure, and allows one to handle a variety of real-world time-dependent data. We give details of the Expectation-Maximization algorithm for computing the maximum likelihood estimates of model parameters and we illustrate the method with two real applications describing the relationship between patent counts and research and development expenditures, and between stock and market returns via the Capital Asset Pricing Model.
0306-7734
427-454
Maruotti, Antonello
7096256c-fa1b-4cc1-9ca4-1a60cc3ee12e
Maruotti, Antonello
7096256c-fa1b-4cc1-9ca4-1a60cc3ee12e

Maruotti, Antonello (2011) Mixed hidden Markov models for longitudinal data: an overview. International Statistical Review, 79 (3), 427-454. (doi:10.1111/j.1751-5823.2011.00160.x).

Record type: Article

Abstract

In this paper we review statistical methods which combine hidden Markov models (HMMs) and random effects models in a longitudinal setting, leading to the class of so-called mixed HMMs. This class of models has several interesting features. It deals with the dependence of a response variable on covariates, serial dependence, and unobserved heterogeneity in an HMM framework. It exploits the properties of HMMs, such as the relatively simple dependence structure and the efficient computational procedure, and allows one to handle a variety of real-world time-dependent data. We give details of the Expectation-Maximization algorithm for computing the maximum likelihood estimates of model parameters and we illustrate the method with two real applications describing the relationship between patent counts and research and development expenditures, and between stock and market returns via the Capital Asset Pricing Model.

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More information

Published date: December 2011
Organisations: Statistics, Statistical Sciences Research Institute

Identifiers

Local EPrints ID: 341228
URI: http://eprints.soton.ac.uk/id/eprint/341228
ISSN: 0306-7734
PURE UUID: aa982ecb-5301-4be5-befc-5e92879aabe3

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Date deposited: 18 Jul 2012 14:14
Last modified: 14 Mar 2024 11:36

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Contributors

Author: Antonello Maruotti

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