The effect of project information on the accuracy of building price forecasts

A fundamental proposition is that the accuracy of the designer's tender price forecasts is positively correlated with the amount of information available for that project. The paper describes an empirical study of the effects of the quantity of information available on practicing Quantity Surveyors' forecasting accuracy. The methodology involved the surveyors repeatedly revising tender price forecasts on receipt of chunks of project information. Each of twelve surveyors undertook two projects and selected information chunks from a total of sixteen information types. The analysis indicated marked differences in accuracy between different project types and experts/non-experts. The expert surveyors' forecasts were not found to be significantly improved by information other than that of basic building type and size, even after eliminating project type effects. The expert surveyors' forecasts based on the knowledge of building type and size alone were, however, found to be of similar accuracy to that of average practitioners pricing full bills of quantities.

Which estimating technique?

This paper presents a unified view of the relationship between (1) quantity and (2) price generating mechanisms in estimating individual prime construction costs/prices. A brief review of quantity generating techniques is provided with particular emphasis on experientially based assumptive approaches and this is compared with the level of pricing data available for the quantities generated in terms of reliability of the ensuing prime cost estimates. It is argued that there is a tradeoff between the reliability of quantity items and reliability of rates. Thus it is shown that the level of quantity generation is optimised by maximising the joint reliability function of the quantity items and their associated rates. Some thoughts on how this joint reliability function can be evaluated and quantified follow. The application of these ideas is described within the overall strategy of the estimator's decision - "Which estimating technique shall I use for a given level of contract information? - and a case is made for the computer generation of estimates by several methods, with an indication of the reliability of each estimate, the ultimate choice of estimate being left to the estimator concerned. Finally, the potential for the development of automatic estimating systems within this framework is examined.

The distribution of construction project bids

This paper describes an analysis of construction project bids to determine (a) the global distribution and (b) factors influencing the distribution of bids. The global distribution of bids was found, by using a battery of ll test statistics, to be approximated by a three-parameter log normal distribution. No global spread parameter was found. A multivariate analysis revealed the year of tender to be the major influencing factor. Consideration of the construction order, tender price and output indices lead to the conclusion that distributional spread reflected the degree of difference in pricing policies between bidders and the skewness of the distributions reflected the degree of competition. The paper concludes with a tentative model of the causal relationships between the factors and distributional characteristics involved.

Construction Prices : the Market Effect

Teachers of construction economics and estimating have for a long time recognised that there is more to construction pricing than detailed calculation of costs (to the contractor). We always get to the point where we have to say "of course, experience or familiarity of the market is very important and this needs judgement, intuition, etc". Quite how important is the matter in construction pricing is not known and we tend to trivialise its effect. If judgement of the market has a minimal effect, little harm would be done, but if it is really important then some quite serious consequences arise which go well beyond the teaching environment. Major areas of concern for the quantity surveyor are in cost modelling and cost planning - neither of which pay any significant attention to the market effect. There are currently two schools of thought about the market effect issue. The first school is prepared to ignore possible effects until more is known. This may be called the pragmatic school. The second school exists solely to criticise the first school. We will call this the antagonistic school. Neither the pragmatic nor the antagonistic schools seem to be particularly keen to resolve the issue one way or the other. The founder and leader of the antagonistic school is Brian Fine whose paper in 1974 is still the basic text on the subject, and in which he coined the term 'socially acceptable' price to describe what we now recognise as the market effect. Mr Fine's argument was then, and is since, that the uncertainty surrounding the contractors' costing and cost estimating process is such that the uncertainty surrounding the contractors' cost that it logically leads to a market-orientated pricing approach. Very little factual evidence, however, seems to be available to support these arguments in any conclusive manner. A further, and more important point for the pragmatic school, is that, even if the market effect is as important as Mr Fine believes, there are no indications of how it can be measured, evaluated or predicted. Since 1974 evidence has been accumulating which tends to reinforce the antagonists' view. A review of the literature covering both contractors' and designers' estimates found many references to the use of value judgements in construction pricing (Ashworth & Skitmore, 1985), which supports the antagonistic view in implying the existence of uncertainty overload. The most convincing evidence emerged quite by accident in some research we recently completed with practicing quantity surveyors in estimating accuracy (Skitmore, 1985). In addition to demonstrating that individual quantity surveyors and certain types of buildings had significant effect on estimating accuracy, one surprise result was that only a very small amount of information was used by the most expert surveyors for relatively very accurate estimates. Only the type and size of building, it seemed, was really relevant in determining accuracy. More detailed information about the buildings' specification, and even a sight to the drawings, did not significantly improve their accuracy level. This seemed to offer clear evidence that the constructional aspects of the project were largely irrelevant and that the expert surveyors were somehow tuning in to the market price of the building. The obvious next step is to feed our expert surveyors with more relevant 'market' information in order to assess its effect. The problem with this is that our experts do not seem able to verbalise their requirements in this respect - a common occurrence in research of this nature. The lack of research into the nature of market effects on prices also means the literature provides little of benefit. Hence the need for this study. It was felt that a clearer picture of the nature of construction markets would be obtained in an environment where free enterprise was a truly ideological force. For this reason, the United States of America was chosen for the next stage of our investigations. Several people were interviewed in an informal and unstructured manner to elicit their views on the action of market forces on construction prices. Although a small number of people were involved, they were thought to be reasonably representative of knowledge in construction pricing. They were also very well able to articulate their views. Our initial reaction to the interviews was that our USA subjects held very close views to those held in the UK. However, detailed analysis revealed the existence of remarkably clear and consistent insights that would not have been obtained in the UK. Further evidence was also obtained from literature relating to the subject and some of the interviewees very kindly expanded on their views in later postal correspondence. We have now analysed all the evidence received and, although a great deal is of an anecdotal nature, we feel that our findings enable at least the basic nature of the subject to be understood and that the factors and their interrelationships can now be examined more formally in relation to construction price levels. I must express my gratitude to the Royal Institution of Chartered Surveyors' Educational Trust and the University of Salford's Department of Civil Engineering for collectively funding this study. My sincere thanks also go to our American participants who freely gave their time and valuable knowledge to us in our enquiries. Finally, I must record my thanks to Tim and Anne for their remarkable ability to produce an intelligible typescript from my unintelligible writing.

Key attributes underpinning different markup decision between public and private projects : a China study

In the construction industry, contractors have to improve the efficiency of markup decision-making to survive from fierce business competition. The effect of client type on markup decision has been aware in previous studies and contractors are advocated to take account of decision factors properly when they are confronted with different types of projects. Nevertheless, the rationales behind the inclusion of different factors in markup decision-making for different projects sustain unknown. In this study, fifty-three factors were identified after extensive literature review and interviews with professionals. The identified factors were afterwards grouped under the headings of nine attributes and compiled in a questionnaire for survey in China. Using the Hotelling’s T-square test, it is found that three attributes (i.e., project characteristic, client characteristic, and macro condition) can explain the effect of client type on contractors’ markup decision. The research findings provide useful insights into the cognition of bid pricing as well as the improvement of bidding efficiency. While the research works were situated in China, contractors in other countries could benefit from the research findings in a similar vein.

Synergies and goal conflicts for climate change policy and spatial planning

The purpose of this paper is to identify goal conflicts – both actual and potential – between climate and social policies in government strategies in response to the growing significance of climate change as a socioecological issue (IPCC 2007). Both social and climate policies are political responses to long-term societal trends related to capitalist development, industrialisation, and urbanisation (Koch, 2012). Both modify these processes through regulation, fiscal transfers and other measures, thereby affecting conditions for the other. This means that there are fields of tensions and synergies between social policy and climate change policy. Exploring these tensions and synergies is an increasingly important task for navigating genuinely sustainable development. Gough et al (2008) highlight three potential synergies between social and climate change policies: First, income redistribution – a traditional concern of social policy – can facilitate use of and enhance efficiency of carbon pricing. A second area of synergy is housing, transport, urban policies and community development, which all have potential to crucially contribute towards reducing carbon emissions. Finally, climate change mitigation will require substantial and rapid shifts in producer and consumer behaviour. Land use planning policy is a critical bridge between climate change and social policy that provides a means to explore the tensions and synergies that are evolving within this context. This paper will focus on spatial planning as an opportunity to develop strategies to adapt to climate change, and reviews the challenges of such change. Land use and spatial planning involve the allocation of land and the design and control of spatial patterns. Spatial planning is identified as being one of the most effective means of adapting settlements in response to climate change (Hurlimann and March, 2012). It provides the instrumental framework for adaptation (Meyer, et al., 2010) and operates as both a mechanism to achieve adaptation and a forum to negotiate priorities surrounding adaptation (Davoudi, et al., 2009). The acknowledged role of spatial planning in adaptation however has not translated into comparably significant consideration in planning literature (Davoudi, et al., 2009; Hurlimann and March, 2012). The discourse on adaptation specifically through spatial planning is described as ‘missing’ and ‘subordinate’ in national adaptation plans (Greiving and Fleischhauer, 2012),‘underrepresented’ (Roggema, et al., 2012)and ‘limited and disparate’ in planning literature (Davoudi, et al., 2009). Hurlimann and March (2012) suggest this may be due to limited experiences of adaptation in developed nations while Roggema et al. (2012) and Crane and Landis (2010) suggest it is because climate change is a wicked problem involving an unfamiliar problem, various frames of understanding and uncertain solutions. The potential for goal conflicts within this policy forum seem to outweigh the synergies. Yet, spatial planning will be a critical policy tool in the future to both protect and adapt communities to climate change.

The Australian clean energy package and the law of the world trade organisation : an analysis of compliance issues

This thesis is a study of whether the Australian Clean Energy Package complies with the rules of the World Trade Organization. It examines the legal framework for the Australian carbon pricing mechanism and related arrangements, using World Trade Organization law as the framework for analysis. In doing so, this thesis deconstructs the Clean Energy Package by considering the legal properties of eligible emissions units, the assistance measures introduced by the Package and the liabilities created by the carbon pricing mechanism.

International tax and the Australian wine industry: Is your client’s product destined to sail the seven seas?

The export market for Australian wine continues to grow at a rapid rate, with imported wines also playing a role in market share in sales in Australia. It is estimated that over 60 per cent of all Australian wine is exported, while 12 per cent of wine consumed in Australia has overseas origins. In addition to understanding the size and direction (import or export) of wines, the foreign locales also play an important role in any tax considerations. While the export market for Australian produced alcohol continues to grow, it is into the Asian market that the most significant inroads are occurring. Sales into China of bottled wine over $7.50 per litre recently overtook the volume sold our traditional partners of the United States and Canada. It is becoming easier for even small to medium sized businesses to export their services or products overseas. However, it is vital for those businesses to understand the tax rules applying to any international transactions. Specifically, one of the first tax regimes that importers and exporters need to understand once they decide to establish a presence overseas is transfer pricing. These are the rules that govern the cross-border prices of goods, services and other transactions entered into between related parties. This paper is Part 2 of the seminar presented on transfer pricing and international tax issues which are particularly relevant to the wine industry. The predominant focus of Part 2 is to discuss four key areas likely to affect international expansion. First, the use of the available transfer pricing methodologies for international related party transactions is discussed. Second, the affects that double tax agreements will have on taking a business offshore are considered. Third, the risks associated with aggressive tax planning through tax information exchange agreements is reviewed. Finally, the paper predicts future ‘trip-wires’ and areas to ‘watch out for’ for practitioners dealing with clients operating in the international arena.

“Would you; could you; on a boat?” Wait-time and travel-time activities during river ferry journeys and their relationship to overall satisfaction in Brisbane Queensland

This study investigates travel behaviour and wait-time activities as a component of passenger satisfaction with public transport in Brisbane, Australia. Australian transport planners recognise a variety of benefits to encouraging a mode shift away from automobile travel in favour of active and public transport use. Efforts to increase public transport ridership have included introducing state of the art passenger information systems, improving physical station access, and integrating system pricing, routes and scheduling for train, bus and ferry. Previous research regarding satisfaction with public transport emphasizes technical dimensions of service quality, including the timing and reliability of service. Those factors might be especially significant for frequent (commuting) travellers who look to balance the cost and efficiency of their travel options. In contrast, infrequent (leisure) passengers may be more concerned with way finding and the sensory experience of the journey. Perhaps due to the small relative proportion of trips made by river ferry compared to bus and rail, this mode of public transport has not received as much attention in travel-behaviour research. This case study of Brisbane’s river ferry system examines ferry passengers at selected terminals during peak and off-peak travel times to find out how travel behaviours and activities correlate to satisfaction with ferry travel. Data include 416 questionnaires completed by passengers intercepted during wait times at seven CityCat terminals in Brisbane. Descriptive statistical analysis revealed associations between specific wait time activities and satisfaction levels that could inform planners seeking to increase ridership and quality of life through ferry-oriented development.

Self excitation in equity indices

A "self-exciting" market is one in which the probability of observing a crash increases in response to the occurrence of a crash. It essentially describes cases where the initial crash serves to weaken the system to some extent, making subsequent crashes more likely. This thesis investigates if equity markets possess this property. A self-exciting extension of the well-known jump-based Bates (1996) model is used as the workhorse model for this thesis, and a particle-filtering algorithm is used to facilitate estimation by means of maximum likelihood. The estimation method is developed so that option prices are easily included in the dataset, leading to higher quality estimates. Equilibrium arguments are used to price the risks associated with the time-varying crash probability, and in turn to motivate a risk-neutral system for use in option pricing. The option pricing function for the model is obtained via the application of widely-used Fourier techniques. An application to S&P500 index returns and a panel of S&P500 index option prices reveals evidence of self excitation.

Principles of investments

"Emphasises asset allocation while presenting the practical applications of investment theory. The authors concentrate on the intuition and insights that will be useful to students throughout their careers as new ideas and challenges emerge from the financial marketplace. It provides a good foundation to understand the basic types of securities and financial markets as well as how trading in those markets is conducted. The Portfolio Management section is discussed towards the end of the course and supported by a web-based portfolio simulation with a hypothetical $100,000 brokerage account to buy and sell stocks and mutual funds. Students get a chance to use real data found in the Wall Street Survivor simulation in conjunction with the chapters on investments. This site is powered by StockTrak, the leading provider of investment simulation services to the academic community. Principles of Investments includes increased attention to changes in market structure and trading technology. The theory is supported by a wide range of exercises, worksheets and problems."--publisher website Contents: Investments: background and issues -- Asset classes and financial markets -- Securities markets -- Managed funds and investment management -- Risk and return: past and prologue -- Efficient diversification -- Capital asset pricing and arbitrage pricing theory -- The efficient market hypothesis -- Bond prices and yields -- Managing bond portfolios -- Equity valuation -- Macroeconomic and industry analysis -- Financial statement analysis -- Investors and the investment process -- Hedge funds -- Portfolio performance evaluation.

The effect of consumer education on unit price usage : an early exploratory study

Consumer awareness and usage of Unit Price (UP) information continues to hold academic interest. Originally designed as a device to enable shoppers to make comparisons between grocery products, it is argued consumers still lack a sufficient understanding of the device. Previous research has tended to focus on product choice, effect of time, and structural changes to price presentation. No studies have tested the effect of UP consumer education on grocery shopping expenditure. Supported by distributed learning theories, this is the first study to condition participants over a twenty week period, to comprehend and employ UP information while shopping. A 3x5 mixed factorial design was employed to collect data from 357 shoppers. A 3 (Control, Massed, Spaced) x 5 (Time Point: Week 0, 5, 10, 15 and 20) mixed factorial analysis of variance (ANOVA) was performed to analyse the data. Preliminary results revealed that the three groups differed in their average expenditure over the twenty weeks. The Control group remained stable across the five time points. Results indicated that both intensive (Massed) and less intensive (Spaced) exposure to UP information achieved similar results, with both group reducing average expenditure similarly by Week 5. These patterns held for twenty weeks, with conditioned groups reducing their grocery expenditure by over 10%. This research has academic value as a test of applied learning theories. We argue, retailers can attain considerable market advantages as efforts to enhance customers’ knowledge, through consumer education campaigns, can have a positive and strong impact on customer trust and goodwill toward the organisation. Hence, major practical implications for both regulators and retailers exist.

Software as a service (SaaS) for small and medium enterprises (SMEs) : the role of intermediaries

Software as a Service (SaaS) is anticipated to provide significant benefits to small and medium enterprises (SMEs) due to ease of access to high-end applications, 7*24 availability, utility pricing, etc. However, underlying SaaS is the assumption that SMEs will directly interact with the SaaS vendor and use a self-service model. In practice, we see the rise of SaaS intermediaries who support SMEs with using SaaS. This paper reports on an empirical study of the role of intermediaries in terms of how they support SMEs in sourcing and leveraging SaaS for their business. The knowledge contributions of this paper are: (1) the identification and description of the role of SaaS intermediaries and (2) the specification of different roles of SaaS intermediaries, in particular a more basic role with technology orientation and operational alignment perspective and (3) a more added value role with customer orientation and strategic alignment perspective.

Brand value of property in Bangkok Metropolitan Region (BMR), Thailand

This paper aims to evaluate the brand value of property in subdivision developments in the Bangkok Metropolitan Region (BMR), Thailand. The result has been determined by the application of a hedonic price model. The development of the model is developed based on a sample of 1,755 property sales during the period of 1992-2010 in eight zones of the BMR. The results indicate that the use of a semi-logarithmic model has stronger explanatory power and is more reliable. Property price increases 12.90% from the branding. Meanwhile, the price annually increases 2.96%; lot size and dwelling area have positive impacts on the price. In contrast, duplexes and townhouses have a negative impact on the price compared to single detached houses. Moreover, the price of properties which are located outside the Bangkok inner city area is reduced by 21.26% to 43.19%. These findings also contribute towards a new understanding of the positive impact of branding on the property price in the BMR. The result is useful for setting selling prices for branded and unbranded properties, and the model could provide a reference for setting property prices in subdivision developments in the BMR.

Frontier Techniques for Measuring and Estimating Airport Efficiency : An Empirical Review with Practical Guidelines for Analysis and Future Research

Airport efficiency is important because it has a direct impact on customer safety and satisfaction and therefore the financial performance and sustainability of airports, airlines, and affiliated service providers. This is especially so in a world characterized by an increasing volume of both domestic and international air travel, price and other forms of competition between rival airports, airport hubs and airlines, and rapid and sometimes unexpected changes in airline routes and carriers. It also reflects expansion in the number of airports handling regional, national, and international traffic and the growth of complementary airport facilities including industrial, commercial, and retail premises. This has fostered a steadily increasing volume of research aimed at modeling and providing best-practice measures and estimates of airport efficiency using mathematical and econometric frontiers. The purpose of this chapter is to review these various methods as they apply to airports throughout the world. Apart from discussing the strengths and weaknesses of the different approaches and their key findings, the paper also examines the steps faced by researchers as they move through the modeling process in defining airport inputs and outputs and the purported efficiency drivers. Accordingly, the chapter provides guidance to those conducting empirical research on airport efficiency and serves as an aid for aviation regulators and airport operators among others interpreting airport efficiency research outcomes.