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Motivation: There is great interest to understand the impact of rare variants in human diseases using large sequence datasets. In deep sequences datasets of >10,000 samples, ~10% of the variant sites are observed to be multi-allelic. Many of the multi-allelic variants have been shown to be functional and disease relevant. Proper analysis of multi-allelic variants is critical to the success of a sequencing study, but existing methods do not properly handle multi-allelic variants and can produce highly misleading association results. Results: We propose novel methods to encode multi-allelic sites, conduct single variant and gene-level association analyses, and perform meta-analysis for multi-allelic variants. We evaluated these methods through extensive simulations and the study of a large meta-analysis of ~18,000 samples on the cigarettes-per-day phenotype. We showed that our joint modeling approach provided an unbiased estimate of genetic effects, greatly improved the power of single variant association tests, and enhanced gene-level tests over existing approaches. Availability: Software packages implementing these methods are available at (https://github.com/zhanxw/rvtests http://genome.sph.umich.edu/wiki/RareMETAL).

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