Using the Big Mac index for comparing construction costs internationally

This paper explores the use of purchasing power parity (PPP) in the comparison of construction costs between different countries, and whether the development of construction-specific indices will improve reliability.

The approach adopted is to compare the construction cost of a typical five star international hotel per square metre in each of ten major cities using a range of PPP methods and to comment on their variability. In particular, this paper looks at whether an index based on the price of a McDonalds Big Mac3 hamburger is a viable alternative when compared against the mainstream methods. The recent publication of construction-specific indices as part of the Eurostat-OECD joint PPP program is also compared against generic indices and the discrepancy is calculated.

The paper concludes with reflections about which approach is preferable when attempting to assess global construction relativities and what further research is needed.

International comparisons of construction industry performance: further investigations

While there have been many attempts at comparisons of construction performance over the past 50 years, the results have generally been inconclusive and/or contradictory.

Such comparisons are of great interest to industry, governments and theorists alike but there is little agreement as to how they are best done. A variety of methodologies have been used, however, the lack of satisfactory outcomes has been due largely to one factor, the lack of a truly reliable method for comparing construction costs in different currencies

Exchange rates are recognised as being unsuitable, and while purchasing power parity (PPP) has a long history, the method still has many critics. In addition, the nature of the building industry and its products makes the establishment of reliable construction PPPs very difficult. Both the UN’s International Comparison Program (ICP) and the European Union gather data for the production of construction-specific PPP indices, but neither body publishes them, as there is too much doubt about their reliability.

New approaches are being developed and some are soon to be trialled. This paper looks at the problems, describes and discusses some new approaches, and assesses their potential.

Investigating relationships of construction prices in Australia using cointegration analysis

Research on construction prices is significant for contractors and traders. A comprehensive understanding of construction prices may influence crucial decisions in business operation and arbitrage activities. This study focuses on the cointegration relationships of regional construction prices in Australia by using a range of econometric techniques including the stationarity test, the Engle-Granger cointegration approach examines the long run equilibrium relationships within the regional markets, and the error correction models explore the short run disequilibrium relationships. Finds of this study reveal that the economic system in which the construction industry participants operate is characterized by a highly competitive, integrated marketplace, Especially in Melbourne and Sydney. But exclude Northern Territory and Queensland. Furthermore, the results of long term relationships estimation suggest that there are 15 pairs of regional construction prices have long term equilibrium relationships. Additionally, the causalities and diffusion among the construction price indices in six states and two territories of Australia are estimated in this study. These outcomes suggest that causal links between regions mainly exist among adjoining states.

An economic analysis of construction industries producer prices in Australia

Research on construction prices is significant for contractors and traders. A comprehensive understanding of construction prices may influence crucial decisions in business operation and arbitrage activities. This study focuses on the cointegration relationships of regional construction prices in Australia by using a range of econometric techniques including the stationarity test, the Engle-Granger cointegration approach and error correction model. The cointegration relationships amongst the regional construction prices are detected in this study. The application of the Engle-Granger cointegration approach examines the long run equilibrium relationships within the regional markets, and the error correction models explore the short run disequilibrium relationships. Results of this study suggest that the economic system in which construction industry participants operate is characterised by a highly competitive integrated marketplace. Furthermore, the causalities and diffusion patterns among the construction price indices in six states and two territories of Australia are drawn by the cointegration analysis. These outcomes reveal a pattern of diffusion paths and network linkages among the six states and two territories, and then expose the regional price linkages.

lnvestigating spatial linkages of construction prices in Australia's regions

Linkages among different construction markets have attracted great of attention from the construction economist. With notable exceptions, most of this infestation has carried out by using input-output analysis. Interactions among regional construction markets have been discussed in few studies and none of them investigate spatial effects on the regional construction markets. This study employed spatial econometric techniques, spatial autocorrelation and convergence tests, to analysis interactions and linkages among construction price indices in Australian six states and two territories. The empirical results indicate the presence of significant positive spatial correlation between the construction prices in Australian eight construction markets and the degree of dependence decrease sufficiently quickly as the space between units increase. The results of convergence test further present evidence on "ripple effect" in the construction prices in Australian regional markets and the changes in regional construction price would positively influence neighboring states first, and then spread out into others, and then the regional prices converge and reach a long-run equilibrium in the following quarters. Urban development policymakers and construction developers could benefit from the analysis of spatial linkages in regional construction markets.

Spatial linkages among Australian construction markets

The linkages among different construction markets have recently attracted much attention from construction economists. The interactions among regional construction markets have been discussed in a few studies, most of which have been carried out by using input-output methods, and none of them investigated spatial effects on the regional construction markets. This study employed spatial econometric techniques, including spatial autocorrelation and convergence tests, to analyse interactions and linkages among construction price indices in Australian six states and two territories. The empirical results indicate the presence of significant positive spatial correlation among the construction prices in Australian eight construction markets and the degree of dependence decreasing sufficiently quickly as the space between regions increases. The results of convergence test further provide evidence of existence of a ripple effect in construction prices among the Australian regional markets and the changes in construction prices in a state would first positively influence neighbouring states, and then spread out into other non-neighbouring states or territories.

Pointwise construction of Lippschitz aggregation operators with specific properties

This paper describes an approach to pointwise construction of general aggregation operators, based on monotone Lipschitz approximation. The aggregation operators are constructed from a set of desired values at certain points, or from empirically collected data. It establishes tight upper and lower bounds on Lipschitz aggregation operators with a number of different properties, as well as the optimal aggregation operator, consistent with the given values. We consider conjunctive, disjunctive and idempotent n-ary aggregation operators; p-stable aggregation operators; various choices of the neutral element and annihilator; diagonal, opposite diagonal and marginal sections; bipolar and double aggregation operators. In all cases we provide either explicit formulas or deterministic numerical procedures to determine the bounds. The findings of this paper are useful for construction of aggregation operators with specified properties, especially using interpolation schemata.

Malmquist indices of total factor productivity changes in the Australian construction industry

Construction is an important industry and forms a vital part of national economics in the world. Factors affecting the productivity of the construction industry should be measured appropriately to reflect its development situation and economic performance. The Malmquist index method with a novel decomposition technique is employed to estimate the total factor productivity of the Australian construction industry during the period 1990-2007 and to analyse the factors affecting the technological change in the industry. Research results exemplified by two input variables and one output variable elaborate how construction technology, pure technical efficiency and scale economy take effect in the change of construction productivity. In addition, based on temporal and spatial comparisons, the analysis for construction productivities reveals their changes over time and across the country. Proposals and recommendations are expected to be beneficial for policy making and strategic decisions to improve the performance of the Australian construction industry.

Multifactor productivity measures of construction sectors using OECD input-output database

This research develops a new productivity measurement framework for the construction sector in the light of an input-output table. Three group multifactor productivity indicators are formulated based on the multiplier concepts in the input-output analysis. This measurement framework focuses on the intro-industry flows of products and considers the direct and indirect effects of input and output. Moreover, this framework enables us to measure the multifactor productivity of a specific sector systematically. Historical analyses and international comparisons are carried out to indicate the differences of the productivity of the construction sectors in seven selected countries, using the newly published OECD input-output database. Research findings are expected to clarify how technological, organizational and political factors affect the productivity growth, enabling the policy makers, construction businesses and researchers to quantify the competitive ability of the construction sector.

Construction of aggregation operators for automated decision making via optimal interpolation and global optimization

This paper examines methods of point wise construction of aggregation operators via optimal interpolation. It is shown that several types of application-specific requirements lead to interpolatory type constraints on the aggregation function. These constraints are translated into global optimization problems, which are the focus of this paper. We present several methods of reduction of the number of variables, and formulate suitable numerical algorithms based on Lipschitz optimization.

Construction of aggregation operators with noble reinforcement

This paper examines disjunctive aggregation operators used in various recommender systems. A specific requirement in these systems is the property of noble reinforcement: allowing a collection of high-valued arguments to reinforce each other while avoiding reinforcement of low-valued arguments. We present a new construction of Lipschitz-continuous aggregation operators with noble reinforcement property and its refinements.

Interpolatory type construction of general aggregation operators

In this chapter we examine a number of methods to construct aggregation operators of interpolatory type for specific applications. The construction is based on the desired values of the aggregation operator at certain prototypical points, and on other desired properties, such as, conjuctive, disjunctive or averaging behaviour, symmetry and marginals.

Exploring intersectoral linkages between real estate and construction

Even though linkages have attracted a lot of research interest, few researchers focus on the intersectoral linkages between two specific sectors. This research therefore proposes an indirect intersectoral linkage measure model to explore linkages between the real estate and construction sectors using the Hypothetical Extraction Method (HEM). Using the OECD input-output tables, the direct, total intersectoral linkages and the proposed indirect intersectoral linkages are explored and tested respectively for seven OECD countries over twenty years. The findings describe that the intersectoral linkages from construction to real estate are larger than those from real estate to construction. The statistical testing results imply that the proposed indirect intersectoral linkage measure method seems to be appropriate to analyse the intersectoral linkage between the construction and real estate sectors.

Machismo and the construction of immigrant latin American masculinities

While a growing number of North American authors have researched Latin American men and masculinities within Latin America as well as the experiences of Latin American men migrating to the United States, there has been little research on the specific issues facing Latin American men in Australia. In this chapter we explore the experiences in Australia of a variety of male migrants from Latin America through three key elements which emerged through our research: the importance of men as 'providers' for the family and the place in men's sense of self; the changing nature of men's and women's roles and statuses in Australian society and their difference from Latin America; and the shifting nature of what constitutes 'home' and a sense of belonging for Latin American men. In addressing the issues that the men face, we also examine the nature of the discourses on machismo and the almost fetishised nature of its oversimplified usage in relation to Latin American men generally and in defining their identities in Australia.