Mixture models with a black-hole component

Abstract

We define a class of mixture models in which a component comprises an assortment of units that are not associated with any proper distribution. The models, motivated by the EM algorithm and fitted by its simple adaptation, are illustrated on several examples with large samples, one of them about transactions of residential properties in Wellington, New Zealand, in 2006. © 2010 Springer-Verlag Berlin Heidelberg.