The impact of planning delays and other holding costs on housing affordability

Housing affordability is gaining increasing prominence in the Australian socioeconomic landscape, despite strong economic growth and prosperity. It is a major consideration for any new development. However, it is multi-dimensional, has many facets, is complex and interwoven. One factor widely held to impact housing affordability is holding costs. Although it is only one contributor, the nature and extent of its impact requires clarification. It is certainly more multifarious than simple calculation of the interest or opportunity cost of land holding. For example, preliminary analysis suggests that even small shifts in the regulatory assessment period can significantly affect housing affordability. Other costs associated with “holding” also impact housing affordability, however these costs cannot always be easily identified. Nevertheless it can be said that ultimately the real impact is felt by those whom can least afford it - new home buyers whom can be relatively easily pushed into the realms of un-affordability.

Operationalizing the resource based view for nascent and young firms : developing scales for resource advantages and disadvantages

Principal Topic: It is well known that most new ventures suffer from a significant lack of resources, which increases the risk of failure (Shepherd, Douglas and Shanley, 2000) and makes it difficult to attract stakeholders and financing for the venture (Bhide & Stevenson, 1999). The Resource-Based View (RBV) (Barney, 1991; Wernerfelt, 1984) is a dominant theoretical base increasingly drawn on within Strategic Management. While theoretical contributions applying RBV in the domain of entrepreneurship can arguably be traced back to Penrose (1959), there has been renewed attention recently (e.g. Alvarez & Busenitz, 2001; Alvarez & Barney, 2004). This said, empirical work is in its infancy. In part, this may be due to a lack of well developed measuring instruments for testing ideas derived from RBV. The purpose of this study is to develop a measurement scales that can serve to assist such empirical investigations. In so doing we will try to overcome three deficiencies in current empirical measures used for the application of RBV to the entrepreneurship arena. First, measures for resource characteristics and configurations associated with typical competitive advantages found in entrepreneurial firms need to be developed. These include such things as alertness and industry knowledge (Kirzner, 1973), flexibility (Ebben & Johnson, 2005), strong networks (Lee et al., 2001) and within knowledge intensive contexts, unique technical expertise (Wiklund and Shepard, 2003). Second, the RBV has the important limitations of being relatively static and modelled on large, established firms. In that context, traditional RBV focuses on competitive advantages. However, newly established firms often face disadvantages, especially those associated with the liabilities of newness (Aldrich & Auster, 1986). It is therefore important in entrepreneurial contexts to expand to an investigation of responses to competitive disadvantage through an RBV lens. Conversely, recent research has suggested that resource constraints actually have a positive effect on firm growth and performance under some circumstances (e.g., George, 2005; Katila & Shane, 2005; Mishina et al., 2004; Mosakowski, 2002; cf. also Baker & Nelson, 2005). Third, current empirical applications of RBV measured levels or amounts of particular resources available to a firm. They infer that these resources deliver firms competitive advantage by establishing a relationship between these resource levels and performance (e.g. via regression on profitability). However, there is the opportunity to directly measure the characteristics of resource configurations that deliver competitive advantage, such as Barney´s well known VRIO (Valuable, Rare, Inimitable and Organized) framework (Barney, 1997). Key Propositions and Methods: The aim of our study is to develop and test scales for measuring resource advantages (and disadvantages) and inimitability for entrepreneurial firms. The study proceeds in three stages. The first stage developed our initial scales based on earlier literature. Where possible, we adapt scales based on previous work. The first block of the scales related to the level of resource advantages and disadvantages. Respondents were asked the degree to which each resource category represented an advantage or disadvantage relative to other businesses in their industry on a 5 point response scale: Major Disadvantage, Slight Disadvantage, No Advantage or Disadvantage, Slight Advantage and Major Advantage. Items were developed as follows. Network capabilities (3 items) were adapted from (Madsen, Alsos, Borch, Ljunggren & Brastad, 2006). Knowledge resources marketing expertise / customer service (3 items) and technical expertise (3 items) were adapted from Wiklund and Shepard (2003). flexibility (2 items), costs (4 items) were adapted from JIBS B97. New scales were developed for industry knowledge / alertness (3 items) and product / service advantages. The second block asked the respondent to nominate the most important resource advantage (and disadvantage) of the firm. For the advantage, they were then asked four questions to determine how easy it would be for other firms to imitate and/or substitute this resource on a 5 point likert scale. For the disadvantage, they were asked corresponding questions related to overcoming this disadvantage. The second stage involved two pre-tests of the instrument to refine the scales. The first was an on-line convenience sample of 38 respondents. The second pre-test was a telephone interview with a random sample of 31 Nascent firms and 47 Young firms (< 3 years in operation) generated using a PSED method of randomly calling households (Gartner et al. 2004). Several items were dropped or reworded based on the pre-tests. The third stage (currently in progress) is part of Wave 1 of CAUSEE (Nascent Firms) and FEDP (Young Firms), a PSED type study being conducted in Australia. The scales will be tested and analysed with a random sample of approximately 700 Nascent and Young firms respectively. In addition, a judgement sample of approximately 100 high potential businesses in each category will be included. Findings and Implications: The paper will report the results of the main study (stage 3 – currently data collection is in progress) will allow comparison of the level of resource advantage / disadvantage across various sub-groups of the population. Of particular interest will be a comparison of the high potential firms with the random sample. Based on the smaller pre-tests (N=38 and N=78) the factor structure of the items confirmed the distinctiveness of the constructs. The reliabilities are within an acceptable range: Cronbach alpha ranged from 0.701 to 0.927. The study will provide an opportunity for researchers to better operationalize RBV theory in studies within the domain of entrepreneurship. This is a fundamental requirement for the ability to test hypotheses derived from RBV in systematic, large scale research studies.

Final : report assessing risk and variation in maintenance and rehabilitation costs for road network

This report presents the results of research projects conducted by The Australian Cooperative Research Centre for Construction Innovation, Queensland University of Technology, RMIT University, Queensland Government Department of Main Roads and Queensland Department of Public Works. The research projects aimed at developing a methodology for assessing variation and risk in investment in road network, including the application of the method in assessing road network performance and maintenance and rehabilitation costs for short- and long-term future investment.

Report : review of the literature : maintenance and rehabilitation costs for roads (Risk-based Analysis)

Realistic estimates of short- and long-term (strategic) budgets for maintenance and rehabilitation of road assessment management should consider the stochastic characteristics of asset conditions of the road networks so that the overall variability of road asset data conditions is taken into account. The probability theory has been used for assessing life-cycle costs for bridge infrastructures by Kong and Frangopol (2003), Zayed et.al. (2002), Kong and Frangopol (2003), Liu and Frangopol (2004), Noortwijk and Frangopol (2004), Novick (1993). Salem 2003 cited the importance of the collection and analysis of existing data on total costs for all life-cycle phases of existing infrastructure, including bridges, road etc., and the use of realistic methods for calculating the probable useful life of these infrastructures (Salem et. al. 2003). Zayed et. al. (2002) reported conflicting results in life-cycle cost analysis using deterministic and stochastic methods. Frangopol et. al. 2001 suggested that additional research was required to develop better life-cycle models and tools to quantify risks, and benefits associated with infrastructures. It is evident from the review of the literature that there is very limited information on the methodology that uses the stochastic characteristics of asset condition data for assessing budgets/costs for road maintenance and rehabilitation (Abaza 2002, Salem et. al. 2003, Zhao, et. al. 2004). Due to this limited information in the research literature, this report will describe and summarise the methodologies presented by each publication and also suggest a methodology for the current research project funded under the Cooperative Research Centre for Construction Innovation CRC CI project no 2003-029-C.

Report : development of a methodology for assessing variation in maintenance and rehabilitation costs

In the previous research CRC CI 2001-010-C “Investment Decision Framework for Infrastructure Asset Management”, a method for assessing variation in cost estimates for road maintenance and rehabilitation was developed. The variability of pavement strength collected from a 92km national highway was used in the analysis to demonstrate the concept. Further analysis was conducted to identify critical input parameters that significantly affect the prediction of road deterioration. In addition to pavement strength, rut depth, annual traffic loading and initial roughness were found to be critical input parameters for road deterioration. This report presents a method developed to incorporate other critical parameters in the analysis, such as unit costs, which are suspected to contribute to a certain degree to cost estimate variation. Thus, the variability of unit costs will be incorporated in this analysis. Bruce Highway located in the tropical east coast of Queensland has been identified to be the network for the analysis. This report presents a step by step methodology for assessing variation in road maintenance and rehabilitation cost estimates.

Assessment and curriculum reform in China : the college English test and tertiary English as a foreign language education.

Educational assessment was a worldwide commonplace practice in the last century. With the theoretical underpinnings of education shifting from behaviourism and social efficiency to constructivism and cognitive theories in the past two decades, the assessment theories and practices show a widespread changing movement. The emergent assessment paradigm, with a futurist perspective, indicates a deviation away from the prevailing large scale high-stakes standardised testing and an inclination towards classroom-based formative assessment. Innovations and reforms initiated in attempts to achieve better education outcomes for a sustainable future via more developed learning and assessment theories have included the 2007 College English Reform Program (CERP) in Chinese higher education context. This paper focuses on the College English Test (CET) - the national English as a Foreign Language (EFL) testing system for non-English majors at tertiary level in China. It seeks to explore the roles that the CET played in the past two College English curriculum reforms, and the new role that testing and assessment assumed in the newly launched reform. The paper holds that the CET was operationalised to uplift the standards. However, the extended use of this standardised testing system brings constraints as well as negative washback effects on the tertiary EFL education. Therefore in the newly launched reform -CERP, a new assessment model which combines summative and formative assessment approaches is proposed. The testing and assessment, assumed a new role - to engender desirable education outcomes. The question asked is: will the mixed approach to formative and summative assessment provide the intended cure to the agony that tertiary EFL education in China has long been suffering - spending much time, yet achieving little effects? The paper reports the progresses and challenges as informed by the available research literature, yet asserts a lot needs to be explored on the potential of the assessment mix in this examination tradition deep-rooted and examination-obsessed society.

Use of Probe Vehicles to Increase Traffic Estimation Accuracy in Brisbane

Traffic congestion is an increasing problem with high costs in financial, social and personal terms. These costs include psychological and physiological stress, aggressivity and fatigue caused by lengthy delays, and increased likelihood of road crashes. Reliable and accurate traffic information is essential for the development of traffic control and management strategies. Traffic information is mostly gathered from in-road vehicle detectors such as induction loops. Traffic Message Chanel (TMC) service is popular service which wirelessly send traffic information to drivers. Traffic probes have been used in many cities to increase traffic information accuracy. A simulation to estimate the number of probe vehicles required to increase the accuracy of traffic information in Brisbane is proposed. A meso level traffic simulator has been developed to facilitate the identification of the optimal number of probe vehicles required to achieve an acceptable level of traffic reporting accuracy. Our approach to determine the optimal number of probe vehicles required to meet quality of service requirements, is to simulate runs with varying numbers of traffic probes. The simulated traffic represents Brisbane’s typical morning traffic. The road maps used in simulation are Brisbane’s TMC maps complete with speed limits and traffic lights. Experimental results show that that the optimal number of probe vehicles required for providing a useful supplement to TMC (induction loop) data lies between 0.5% and 2.5% of vehicles on the road. With less probes than 0.25%, little additional information is provided, while for more probes than 5%, there is only a negligible affect on accuracy for increasingly many probes on the road. Our findings are consistent with on-going research work on traffic probes, and show the effectiveness of using probe vehicles to supplement induction loops for accurate and timely traffic information.

The costs arising from pressure ulcers attributable to malnutrition

Aim To estimate the economic consequences of pressure ulcers attributable to malnutrition. Method Statistical models were developed to predict the number of cases of pressure ulcer, associated bed days lost and the dollar value of these losses in public hospitals in 2002/2003 in Queensland, Australia. The following input parameters were specified and appropriate probability distributions fitted • Number of at risk discharges per annum • Incidence rate for pressure ulcer • Attributable fraction of malnutrition in the development of pressure ulcer • Independent effect of pressure ulcer on length of hospital stay • Opportunity cost of hospital bed day One thousand random re-samples were made and the results expressed as (output) probabilistic distributions. Results The model predicts a mean 16060 (SD 5 671) bed days lost and corresponding mean economic cost of AU$12 968 668 (SD AU$4 924 148) (EUROS 6 925 268 SD 2 629 495; US$ 7 288 391 SD 2 767 371) of pressure ulcer attributable to malnutrition in 2002/2003 in public hospitals in Queensland, Australia. Conclusion The cost of pressure ulcer attributable to malnutrition in bed days and dollar terms are substantial. The model only considers costs of increased length of stay associated with pressure ulcer and not other factors associated with care.

Development of lifetime warranty policies and models for estimating costs

In today's fiercely competitive products market, product warranty has started playing an important role. The warranty period offered by the manufacturer/dealer has been progressively increasing since the beginning of the 20th Century. Currently, a large number of products are being sold with long-term warranty policies in the form of extended warranty, warranty for used products, service contracts and lifetime warranty policies. Lifetime warranties are relatively a new concept. The modelling of failures during the warranty period and the costs for such policies are complex since the lifespan in these policies are not defined well and it is often difficult to tell about life measures for the longer period of coverage due to usage pattern/maintenance activities undertaken and uncertainties of costs over the period. This paper focuses on defining lifetime, developing lifetime warranty policies and models for predicting failures and estimating costs for lifetime warranty policies.

A review of rationale for allocating costs and payments in producing and supplying public sector information

Presentation given by Dr John S Cook at the Queensland Spatial Conference 2008, Global Warming: What’s Happening in Paradise?, held at Holiday Inn, Surfers Paradise,Queensland from 17-19 July, 2008 This presentation provides some semblance of an information infrastructure that is aligned generally to problems of governance in complex organisations.

Approaches for calculation of holding costs in the context of greenfield residential development

There are increasing indications that the contribution of holding costs and its impact on housing affordability is very significant. Their importance and perceived high level impact can be gauged from considering the unprecedented level of attention policy makers have given them recently. This may be evidenced by the embedding of specific strategies to address burgeoning holding costs (and particularly those cost savings associated with streamlining regulatory assessment) within statutory instruments such as the Queensland Housing Affordability Strategy, and the South East Queensland Regional Plan. However, several key issues require further investigation. Firstly, the computation and methodology behind the calculation of holding costs varies widely. In fact, it is not only variable, but in some instances completely ignored. Secondly, some ambiguity exists in terms of the inclusion of various elements of holding costs and assessment of their relative contribution. Perhaps this may in part be explained by their nature: such costs are not always immediately apparent. They are not as visible as more tangible cost items associated with greenfield development such as regulatory fees, government taxes, acquisition costs, selling fees, commissions and others. Holding costs are also more difficult to evaluate since for the most part they must be ultimately assessed over time in an ever-changing environment based on their strong relationship with opportunity cost which is in turn dependant, inter alia, upon prevailing inflation and / or interest rates. This paper seeks to provide a more detailed investigation of those elements related to holding costs, and in so doing determine the size of their impact specifically on the end user. It extends research in this area clarifying the extent to which holding costs impact housing affordability. Geographical diversity indicated by the considerable variation between various planning instruments and the length of regulatory assessment periods suggests further research should adopt a case study approach in order to test the relevance of theoretical modelling conducted.

Changes in accountancy costs for Tasmanian SMEs implementing computerised accounting systems

There have been powerful incentives for Tasmanian Small and Medium-sized Enterprises (SMEs) to adopt information technology to enable them to remain competitive and to comply with legislative regulations. This research study was undertaken to establish whether SMEs implementing computerised accounting systems have a subsequent change in their external accountancy fees. The research study employed a quantitative methodology using survey questionnaires. The study found that in less than 3% of cases SMEs reported a decrease in accountancy fees, in almost 45% of cases the organisation actually experienced a slight to substantial fee increase while 52% reported no change in accountancy fees.

Quantifying the costs of drought : new evidence from life satisfaction data

We estimate the cost of droughts by matching rainfall data with individual life satisfaction. Our context is Australia over the period 2001 to 2004, which included a particularly severe drought. Using fixed-effect models, we find that a drought in spring has a detrimental effect on life satisfaction equivalent to an annual reduction in income of A$18,000. This effect, however, is only found for individuals living in rural areas. Using our estimates, we calculate that the predicted doubling of the frequency of spring droughts will lead to the equivalent loss in life satisfaction of just over 1% of GDP annually.

The conceptualisation, sensitivity and measurement of holding costs and other selected elements impacting housing affordability (Literature review and research methodology for confirmation of PhD candidature)

It is widely held that strong relationships exist between housing, economic status, and well being. This is exemplified by widespread housing stock surpluses in many countries which threaten to destabilise numerous aspects related to individuals and community. However, the position of housing demand and supply is not consistent. The Australian position provides a distinct contrast whereby seemingly inexorable housing demand generally remains a critical issue affecting the socio-economic landscape. Underpinned by high levels of immigration, and further buoyed by sustained historically low interest rates, increasing income levels, and increased government assistance for first home buyers, this strong housing demand ensures elements related to housing affordability continue to gain prominence. A significant, but less visible factor impacting housing affordability – particularly new housing development – relates to holding costs. These costs are in many ways “hidden” and cannot always be easily identified. Although it is only one contributor, the nature and extent of its impact requires elucidation. In its simplest form, it commences with a calculation of the interest or opportunity cost of land holding. However, there is significantly more complexity for major new developments - particularly greenfield property development. Preliminary analysis conducted by the author suggests that even small shifts in primary factors impacting holding costs can appreciably affect housing affordability – and notably, to a greater extent than commonly held. Even so, their importance and perceived high level impact can be gauged from the unprecedented level of attention policy makers have given them over recent years. This may be evidenced by the embedding of specific strategies to address burgeoning holding costs (and particularly those cost savings associated with streamlining regulatory assessment) within statutory instruments such as the Queensland Housing Affordability Strategy, and the South East Queensland Regional Plan. However, several key issues require investigation. Firstly, the computation and methodology behind the calculation of holding costs varies widely. In fact, it is not only variable, but in some instances completely ignored. Secondly, some ambiguity exists in terms of the inclusion of various elements of holding costs, thereby affecting the assessment of their relative contribution. Perhaps this may in part be explained by their nature: such costs are not always immediately apparent. Some forms of holding costs are not as visible as the more tangible cost items associated with greenfield development such as regulatory fees, government taxes, acquisition costs, selling fees, commissions and others. Holding costs are also more difficult to evaluate since for the most part they must be ultimately assessed over time in an ever-changing environment, based on their strong relationship with opportunity cost which is in turn dependant, inter alia, upon prevailing inflation and / or interest rates. By extending research in the general area of housing affordability, this thesis seeks to provide a more detailed investigation of those elements related to holding costs, and in so doing determine the size of their impact specifically on the end user. This will involve the development of soundly based economic and econometric models which seek to clarify the componentry impacts of holding costs. Ultimately, there are significant policy implications in relation to the framework used in Australian jurisdictions that promote, retain, or otherwise maximise, the opportunities for affordable housing.