We consider the inverse problem of recovery of unknown coefficient function
s in differential equations. The set of PDEs constituting the current forwa
rd model describes a special case of two-phase porous-media flow. The focus
of the paper is on the influence of different length scales on parameter e
stimation efficiency. The investigation into these issues is facilitated by
applying a multiscale spline wavelet parametrization of the unknown functi
on. Earlier investigations with an ODE forward model found that use of the
multiscale Haar parametrization had a positive effect on the estimation eff
iciency of a quasi-Newton algorithm. Recently, a way to systematically enha
nce these effects has been suggested. In this paper, we further this approa
ch with the Levenberg-Marquardt algorithm. This results in three variants o
f the Levenberg-Marquardl algorithm, each incorporating a possibility to en
hance multiscale effects. Through numerical experiments with the PDE forwar
d model, we assess the estimation efficiency of the variants when varying t
he enhancement of murtiscale effects.