A Logit Model for Budget Allocation Subject to Multi Budget Sources

Abstract

In a complex and extended system such as a government, the proper allocation of the budget to its sub-entities is always a major challenge. As such for cases like governments, a situation in which multiple budget sources with different concerns available to the sub-entities is common. This study develops an applicable model for large-scale cases in which identifying the flow of capital or budget from (multiple) sources to the sub-entities is sought. Since the influential factors to the allocation process may be mingled with some unknown parameters (as well as known factors) a logit model is developed from past panel data. The logit model is based on the concept of utility, which quantifies t..