Budget Allocations at MSU: Linear Regression Policy Capturing Analysis

Abstract

Under the AER process, the allocation of new funds was procedurally dependent upon the result of a very detailed analysis of unit, department, and college data. Obviously, no allocation process can operate totally on quantitative data and so the admission of highly subjective judgments into the allocation process was essential; however, the amount by which the subjective considerations offset the quantified information is not easily controlled or even determined. This then is the issue at hand. How closely have fund allocations followed the recommendations resulting only from an examination of hard data? Before taking this question on directly, it was necessary to take into consideration some artifacts of the AER procedure itself in order to develop a series of reasonable hypotheses.