The major message that I will be trying to convey is that we often misinterpret the available data because of inadequate attention to how they are produced … (Griliches, 1994, p. 2) The importance of accurate measurement and pertinent modelling of the general level of construction prices cannot be overemphasized. Uses range from macroeconomic statistics such as real value of investment to micro-level budgeting like construction project price forecasts. Numerous research studies posit that the measured productivity growth rates of the construction sector are distorted and that an inaccurate general construction price index is a main villain of the piece. The academic research published in this arena has primarily focused on models to forecast or predict changes in the general construction price level, whereas this research scrutinizes the compilation methods of the general construction price index in Britain and finds that the indices measure the price movement of more traditional building trades but almost completely ignore the mechanical and electrical services. The existing indices also do not gauge the tender price movements of new building work that is not procured through the conventional lump sum BQs route, such as many projects in private housing and PFI markets. These make out a case for allowing resources to the project of developing alternative methodologies: (1) a revised version of the present method; and (2) hedonic price index.Tender price index, construction output deflator, index compilation methodology, construction statistics,
The Office for National Statistics in the UK has developed and adopted a new method for collecting and publishing construction statistics. The analysis of the revised construction new orders series and the associated new UK Department for Business, Innovation and Skills (BIS) output price index for all new construction leads to three conclusions: (1) the new indices have corrected two significant methodological errors, namely the underestimation of the number of main contractors and the underestimation of inflation by BIS output price indices for new construction; (2) the new indices addressed a concern, the orders-output 'credibility gap', in the construction output forecasting literature; and (3) care should be taken when using the revised orders series and new output price index for historic research because a 'credibility gap' exists between the two back series prior to 1990.
Purpose -The aim of this paper is to evaluate the impact of social discount rates on the economic significance of CO 2 mitigation in the benefit-cost analysis of recent amendments of Building Regulations Part L. Design/methodology/approach -The benefit of mitigating CO 2 emission by raising the standard of building in amended building regulations is estimated by an integrated-assessment economic model called DICE at different social discount rates proposed by economists and government. Findings -The benefit of CO 2 mitigation is highly sensitive to the choice of social discount rate that the value of social discount rate is a crucial factor to decide the economic viability of recent and future amendments of Building Regulations Part L. The more positive the social discount rate used in the benefit-cost analysis, the less sustainability appears to be because higher discount rate tips the balance in favour of current benefits against future costs. Research limitations/implications -This paper focuses on the impact of social discount rates on the shadow price of CO 2 emission. Further researches are needed to estimate the private benefits and costs to construct and operate buildings complying with amended Building Regulations Part L so as to produce a solid benefit-cost analysis on the amendment of the building regulations. Practical implications -If sustainable development, similar to other traditional investment, is subject to feasibility judgement in a common metric, more attentions are needed to be given by sustainability literature on the issue of discounting. Originality/value -This paper for the first time evaluates the environmental benefits of amending the Building Regulations and the sensitivity of the benefits to the choice of social discount rates.
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