Regression Model and Neural Network Applied to the Public Spending Execution

Abstract

Artificial Neural Networks are connectionist systems formed by numerous process units called neurons connected to each other, which adapt their structure through learning techniques to solve problems of function approximation and pattern classification. They process information that is supplied to them, either to obtain relationships between them and the objective function that is intended to be approximated, or by classifying these data into different categories. Regression analysis aims to determine the type of functional relationship that exists between a dependent variable and one or more independent variables. The purpose of the research is to use regression methods (multiple regression) and artificial neural networks (multilayer perceptron) to determine the influence of spending execution on the regional government's public budget. 95% of the variability of the budget of Moquegua region has been determined and explained by the three sectors (primary, secondary and tertiary) and 5% is determined by other factors outside the regional government budget. The determination coefficients R2 = 95.9% in the regression model and R2 = 95.3% in the neural network (multilayer perceptron). It has been demonstrated that Artificial neural networks and regression models have obtained very similar results, achieving good and good-fit models.