Rare variant effect estimation and polygenic risk prediction.

Due to their low frequency, estimating the effects of rare variants is challenging. Here we propose RareEffect, a method that first estimates gene-based or region-based heritability and then each variant effect size using an empirical Bayes approach. Our method uses a variance component model, which is popular in rare variant tests, and is designed to provide two levels of effect sizes-gene/region level and variant level-that can provide better interpretation. To adjust for the case-control imbalance in phenotypes, our approach uses a fast implementation of the Firth bias correction. We demonstrate the accuracy and computational efficiency of our method through extensive simulations and analysis of UK Biobank whole-exome sequencing data for 100 traits. Additionally, we show that the effect sizes obtained from our model can be leveraged to improve polygenic score performance, thereby outperforming recently developed methods for rare variant polygenic scoring.